434# Not so squeezy

Indicator 2: Rainbow Multiple Moving

Average (RMMA)

Settings: N/A

Measures: Trending vs Ranging conditions

The next indicator used is something I call the Rainbow

Multiple Moving Average (RMMA). It is, essentially not really

an indicator in the traditional sense, it is actually just eighty

eight Exponential Moving Averages (EMA's), all on the same

chart coloured like a rainbow, hence the name.

Indicator 3: Simple Moving Average (SMA)

Settings: 100SMA and 200SMA on Close

Measures: Support, Resistance and Barriers

Moving averages are very commonly seen in most systems,

usually either as an indication of trend, or used as an entry

signal when one moving average crosses over another. The

RMMA above of course takes this to the extreme, using 88

different averages to paint a picture of the trend, however

using moving averages as crossover entry signals alone has

been proven time and time again to be slow and clumsy,

especially in ranging conditions.

Another use however is to use these averages as dynamic

support and resistance areas. You may be familiar with

straight line trend lines acting as support and resistance

areas, but Moving Averages work just as well, if not better

sometimes.

Indicator 4: Bollinger Bands

Settings: 20,2,Close

Measures: Overbought, oversold conditions

It may seem odd that we are essentially, using the Bollinger

Bands twice in the system, once with the Keltner Channels

to define the squeeze and again here. However they have

two distinct uses.

Anyone who has used oscillators know the concept of

overbought and oversold conditions. Oscillators attempt to

tell us when price is relatively oversold or overbought

compared to recent history. Once these conditions are met,

then we are taught to look for a reversal in price. 4

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