Averages Rainbow Indicator: Eight EMAs In A Single Fan

Written by Dominic Walsh · Published 29 Jul 2026 · Last updated 9 Sep 2026

The averages rainbow indicator turns one moving average into eight. Periods start at `InpBasePeriod` `8` and step up by `InpStep` `6`. Drawn together they make a fan. It opens in a trend and closes in a range.

This build ships as a compiled .ex4 for MT4 and .ex5 for MT5; the screenshots below come from EURUSD H1.

Platforms	MT4 (.ex4) + MT5 (.ex5)
Chart window	Main price chart
Plots	8: EMA 1, EMA 2, EMA 3, EMA 4, EMA 5, EMA 6, EMA 7, EMA 8
Alerts	popup, push notification, email, sound
Inputs	13

What the Averages Rainbow Indicator draws on the chart

`EMA 1` runs red at the fastest period and `EMA 8` runs violet at the slowest.

The six lines between them shade through orange, gold, green and blue.

Wide spacing means a trend, and tight spacing means compression.

A corner panel reports the current bias and whether the fan is squeezed.

• EMA 1: line, red, width 2
• EMA 2: line, orange red, width 2
• EMA 3: line, orange, width 2
• EMA 4: line, gold, width 2
• EMA 5: line, lime green, width 2
• EMA 6: line, deep sky blue, width 2
• EMA 7: line, royal blue, width 2
• EMA 8: line, blue violet, width 3

How the Averages Rainbow Indicator calculates its values

Eight periods, evenly spaced

The fastest line uses `InpBasePeriod` `8`. Each line after it adds `InpStep` `6`. So the slowest reaches fifty. Even spacing makes the fan open smoothly.

Each line seeds from a simple average

A recursive average started from zero would spike at the left edge. So each line begins with a simple mean at its own warmup point. The recursion runs from there.

Compression has a definition

`InpSqueezeMult` `0.35` compares the gap between fastest and slowest against recent range. Below that fraction the panel calls it a squeeze. That gives the state a number rather than a feel.

How to read the signals

Order matters more than any single line.

A fan in strict order means one direction holds across every period.

Tangled lines mean no window agrees.

The alert fires when `EMA 1` crosses `EMA 8`.

Alert channels in this build: popup, push notification, email and sound, one message per closed bar.

`EnableAlerts` covers the whole set and starts true beside `EnablePopup`. `EnablePushNotify` reaches a handset, `EnableEmail` sends mail and `EnableSound` plays `SoundFile`. Those three arrive off. The flip reports once per closed bar.

Every Averages Rainbow Indicator input

Core settings

Setting	What it does	Default
InpBasePeriod	Fastest EMA period. Period of the fastest line, default `8`.	8
InpStep	Period step between ribbons. Period added for each slower line, default `6`.	6
InpAppliedPrice	Applied price (0=close,1=open,4=median). Price every line reads, default `PRICE_CLOSE`.	PRICE_CLOSE
InpSqueezeMult	Compression: ribbon width < mult * ATR. Fan width against range that counts as compression, default `0.35`.	0.35

Display settings

Setting	What it does	Default
ShowPanel	Show ribbon panel. Show the bias and compression readout, default `true`.	on
PanelCorner	Corner (0=UL,1=UR,2=LL,3=LR). Corner the readout anchors to, default `0`.	0
PanelBg	Readout background, default `clrBlack`.	black

Alert settings

Setting	What it does	Default
EnableAlerts	Overall control of the routes, default `true`.	on
EnablePopup	Terminal window on a fan flip, default `true`.	on
EnablePushNotify	Handset message on a fan flip, default `false`.	off
EnableEmail	(see inputs panel)	off
EnableSound	(see inputs panel)	off
SoundFile	(see inputs panel)	alert.wav

Settings that fit your chart

A fifty-bar slowest line needs history. EURUSD H1 is the reference chart. The fan opens and closes a few times a week there. On M5 the lines tangle. H4 gives a slow, clear picture.

When the Averages Rainbow Indicator fails

Eight lines is a lot of chart, especially with other tools loaded.

The fan confirms a trend that is already running, since every line lags.

Compression tells you the market is quiet, never which way it breaks.

Copy the compiled Averages Rainbow Indicator file into your MQL4/Indicators folder, and the MT5 build into MQL5/Indicators, then restart the terminal and drag it onto a chart. The step-by-step guide with screenshots is at how to install MT4 and MT5 indicators.

Background reading on the method behind the Averages Rainbow Indicator: Hot equity periods on Wikipedia, idemarker (DEMARKER) at the MQL5 Documentation.

Download the Averages Rainbow Indicator for MT4 and MT5

The zip holds the compiled Averages Rainbow Indicator build for MT4 and MT5, plus a short README. Compiled files only, no source. Enter your email below and the download link arrives in your inbox.

FAQ

What periods does InpStep 6 produce?

Starting from eight, the fan runs 8, 14, 20, 26, 32, 38, 44 and 50. Raising the step spreads the periods further apart, which widens the fan and makes compression rarer. Lowering it packs the lines together.

How does InpSqueezeMult 0.35 define compression?

It holds the gap between the fastest and slowest lines against the recent range reading. When that gap falls under thirty-five percent of range, the panel calls it a squeeze.

Why seed each EMA with a simple average?

A recursive average started from zero makes a huge spike at the left edge of the chart. Seeding at the warmup point with a plain mean lets every line start at a sensible value.

What triggers the EMA 1 alert?

The fastest line crossing the slowest, which means the whole fan has flipped rather than one pair. That is a much rarer event than any single crossing inside the fan.

Are results guaranteed?

No. Trading involves risk. Results are not guaranteed; past performance is not indicative of future results. Use the Averages Rainbow Indicator as one input. Always backtest before trading live.