Rainbow Trend MTF Forex Indicator (MT4)

About the Indicator

The Rainbow Trend MTF Forex Indicator for MT4 is a powerful visual tool that helps traders identify the strength and direction of market trends using a multi-timeframe (MTF) approach.

It displays layered, color-coded lines that reflect real-time market sentiment from multiple timeframes, giving you a clearer, more confident view of the bigger picture.

Ideal for intraday and swing trading setups.

Key Features of the Rainbow Trend MTF Indicator

• Multi-timeframe trend analysis in one view
• Color-coded trend strength visualization
• Adapts to all timeframes and forex pairs
• Helps avoid false signals in ranging markets
• Supports trend continuation and reversal strategies

How It Works:

• A strong bullish trend occurs when the candlestick is positioned above the MTF rainbow.
• A strong bearish trend occurs when the candlestick is positioned below the MTF rainbow.

Free Download

Download the “asmfi-rainbow-mtf-indicator.ex4” indicator for MT4

Benefits of Using the Rainbow Trend Indicator

• Clear overview of short-term and long-term trends
• Confirms price action entries with multi-timeframe alignment
• Filters out noise in choppy markets
• Supports momentum-based entries and exits

Indicator Example Chart (EUR/USD H1)

How To Trade Forex Using This Tool

Trade Entry Signal:

• Open a buy trade position as soon as the candlestick closes above the MTF rainbow from below
• Open a sell trade position as soon as the candlestick closes below the MTF rainbow from above

Stop Loss:

• Buy Signal: Place SL below the lowest band or recent swing low
• Sell Signal: Place SL above the highest band or most recent swing high

Take Profit:

• Buy Signal: TP at next key resistance level or exit when colors start shifting to mixed or red
• Sell Signal: Target next key support zone or exit when colors begin flattening or shifting to neutral

Download Now

Download the “asmfi-rainbow-mtf-indicator.ex4” indicator for Metatrader 4

Rainbow Trend MTF + BB MACD V6 Strategy for MT4

This strategy combines the multi-timeframe trend strength signals of the Rainbow Trend MTF Forex Indicator with the momentum and volatility filtering of the BB MACD V6 Forex Indicator.

Together, these indicators help traders enter high-probability trend-following trades with precise timing and noise reduction.

What Is This Strategy About?

The Rainbow Trend MTF indicator provides a comprehensive view of trend direction and strength by combining multiple timeframe signals into a clear color-coded display.

The BB MACD V6 indicator integrates Bollinger Bands and MACD to identify momentum shifts while filtering market noise.

When both indicators align in direction, traders receive reliable entry signals for swing or intraday trades.

Buy Rules

• Confirm a bullish trend that occurs when the candlestick closes above the Rainbow.
• Wait for the BB MACD V6 to display a bullish crossover (MACD line crossing above the signal line) and price trading near or above the upper Bollinger Band.
• Enter a buy trade at the next candle open once both conditions are met.
• Set stop loss below the recent swing low or below the lower Bollinger Band.
• Take profit at predefined resistance levels or trail stops using the Bollinger Band edges.

Sell Rules

• Confirm a bearish trend that occurs when the candlestick closes below the Rainbow.
• Wait for the BB MACD V6 to show a bearish crossover (MACD line crossing below the signal line) with price near or below the lower Bollinger Band.
• Enter a sell trade at the next candle open after confirmation.
• Place a stop loss above the recent swing high or above the upper Bollinger Band.
• Set take profit near support levels or use trailing stops along the Bollinger Band edges.

Advantages

• Multi-timeframe clarity: Rainbow Trend MTF consolidates trend info for better decision-making.
• Momentum and volatility filtering: BB MACD V6 reduces false signals in choppy markets.
• Visual simplicity: Color-coded bars and clear crossovers make entry/exit points easy to identify.
• Adaptable: Works well on M15, M30, H1, and H4 charts for various trading styles.

Drawbacks

• Potential lag: Waiting for confirmation on multiple timeframes and indicators can delay entries.
• Requires patience: Fewer trades but higher quality; not ideal for scalpers.
• Less effective in strong ranging markets: May produce false signals when the market lacks clear direction.

Final Strategy Thoughts

The combination of the Rainbow Trend MTF Forex Indicator and the BB MACD V6 Forex Indicator provides a robust framework for trend-following traders seeking reliable momentum confirmation and noise filtering.

Use this system during active sessions like London and New York for optimal results, always applying sound risk management to maximize long-term gains.

Case Study Example

GBP/USD H1 Chart Analysis (14-Day Sample Period):

• Total Signals: 34 trades
• Winning Trades: 23 (67.6%)
• Average Win: +35 pips
• Average Loss: -15 pips
• Net Result: +640 pips over the testing period

Pros and Cons

Pros:

• Multi-timeframe trend confirmation
• Excellent for filtering low-quality signals
• Easy to read color guidance
• Works across all forex pairs and timeframes

Cons:

• Lagging nature of MAs may delay entries in fast-moving markets

Indicator Specifications

Final Words

The Rainbow Trend MTF Indicator is a unique and highly visual trend-following tool for MT4.

By combining multiple timeframe EMAs into one clean chart overlay, it provides a valuable layer of confirmation for any trading system.