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The Rainbow Moving Average indicator was developed as a variation of the Guppy Multiple Moving Averages indicator designed by Australian trader Daryl Guppy.
The Rainbow Moving Average indicator consists of 22 exponential moving averages (EMA) ranging from 9-period up to 100-period EMAs. These 22 EMAs are plotted on the price chart using the full colour spectrum which makes the indicator look like a “rainbow”. But it’s not just about esthetics – the rainbow indicator is very useful in highlighting trend changes. It was popularized by trader Lars Gottwik in the Godmode trader forum.
The indicator can be applied on any instrument and on any timeframe.