Stormer Rainbow Day Trading Strategy — Step-by-Step Guide & Transcript

[00:02] learned from Stormer for day trading with great accuracy. When with great accuracy. When Stormer is mentioned, good things always come up. It's a truly fantastic and simple strategy that we can

[00:15] simple strategy that we can implement and have a great chance of profiting from day trading. I just want to remind you that there is no endorsement from Storm here. This content is completely independent , okay? We're going to make it

[00:29] really easy for us to understand the idea behind everything we're seeing on the screen. We can see a lot of lines here. What is this? These are lot of lines here. What is this? These are moving averages. So, the first step is to

[00:43] add all these moving averages to the chart. Starting all these moving averages to the chart. Starting here, with the averages 20, 25, 30, 35, 40,

[00:55] here, with the averages 20, 25, 30, 35, 40, 45, 50, and 55. All exponential, from 20 45, 50, and 55. All exponential, from 20 to 55 exponential. There are eight averages to 55 exponential. There are eight averages placed on the graph, time frame graph.

[01:09] Stormer uses 10 minutes. I like to do it in 5 minutes, since it's inspired by Stormer, so I'm going to do it my way so we can see what we can do. What's the idea? This operational chart here is nothing more than what resembles

[01:23] all these lines, these moving averages, a rainbow, right? And that's exactly the name Stormer gives to this strategy, right? It has to do with rainbows. But this shows that when the price, which are the eos, are outside the averages, it's a sign that

[01:39] the market is likely moving in one direction. What can we see What can we see here today? High-speed upward direction. No, it's not sideways, it's not. Yesterday, it was the opposite.

[01:52] Yesterday, everything went down in the mini-index . So it was in a downturn, prices were . So it was in a downturn, prices were falling, and today the price is up. What's the logic? This is the operational aspect that allows for profit. Let's see. After you

[02:05] subscribe to the channel, subscribe now and like the video. Don't forget to leave a like! Let's see how this operation works. Basically, what is it? We've entered all the averages here, from 20 to 55, right? In groups of

[02:22] five. In the hundreds, prices will be far from the averages. And then, when the prices return to within the averages, we'll sound the alarm to possibly

[02:35] enter the trade. So here, look, the price went back, look, the candle came. This candle here, this nice one here, it closed within the moving averages. It's closed here. No matter what the average was, he came, violated the averages, and closed it out. Look, it closed

[02:51] within the averages. And that's where we'll see how we can get involved in the operation, OK? So, this candle here, it closed within the moving averages. What are we going to do? Let's place an entry point here and a stop loss down here on this

[03:07] line. If the next candle breaks through this region to enter the buy trade, simply by opening and breaking

[03:19] opening and breaking above this high, then enter the buy trade. The candle in the sequence didn't reach this high, so there was no opportunity for a trade, no entry point. However, now the entry will be placed here, on the

[03:33] candle in the sequence, at the high of the candle in the sequence. If the next candle surpasses this high here, it's a buy entry point. Look at the candle in the sequence here. He exceeded that maximum, so he made a down payment on the purchase. Where is the stop

[03:50] loss located? The stop loss is placed at the moving average of the candle that triggered the entry. So here it is. The stop loss is placed here on this line. This is the stop. And the profit target can be up to twice the size of this stop loss shown above. Let's

[04:06] see. And the market definitely does . Look, the entrance was right here. Here, and then it went up. He went up. Look how beautiful! It would have been a good down payment on the purchase. Where exactly would Stop be located ? Right here on this line, right?

[04:22] Profit target upwards up to twice the size of this stop target here. So, a very interesting operation when the market is trending, thanks

[04:34] to Stormer who provides us with fantastic free trading strategies like this one . Let's look at an example in a sale here. The logic is the same, only the direction changes. Let's see what happened yesterday. So that was yesterday, right?

[04:48] Yesterday. All the moving averages need to be aligned, starting with the 20, 25, aligned, starting with the 20, 25, 30, 35, 40, 45, 50, and 55 moving averages. Since they are all

[05:01] exponential, the averages must be aligned in that direction. The 20 can't be violating the 25, or the 30 below the 25. No, they have to be aligned, like it is here, from here, look. Here they

[05:16] are all tangled up. Nothing gets done here , right? Nothing, nothing. Nothing here. Now they've all started lining up in the direction from 20 to 55. Okay? When in the direction from 20 to 55. Okay? When the price returns to within the averages and

[05:30] the candle closes, it looks like this one here . This candle here, notice, it went up there because of Stormer's trading strategy, this candle is already valid. Even though he did n't finish within the averages. In my opinion, I wouldn't do it, I wouldn't make the

[05:43] trade, especially because it's a very large candle. The stop would be way too big down here. Let's analyze whether it would be appropriate to make a down payment on the sale. It wouldn't even work. Therefore, the entry point would be if this candle here, right, broke the low of this large

[05:57] candle that violated the moving averages. Notice that this candle here didn't even come down this far , so it wouldn't be a good entry point. But given Storber's operational plan, what should we do now? We would pull the entry point for the sell signal to this candle here. The

[06:11] entry point would be if the candle in the sequence broke through that low. It did n't break. So what do we do then? We're bringing the entry point to the next candle. Notice that this candle here has now broken through. It wasn't

[06:27] interrupted, he crossed the previous minimum. So it would have worked, it would have been processed right here. This candle here, this one would have surpassed the low of the previous one, entry to sell right here

[06:40] above this arrow. Stop. Where is the stop sign? This average here is the average that the candle didn't reach. Right here, stop, profit target. Twice, right?

[06:52] stop, profit target. Twice, right? Twice that stop. Entry here, stop here, 230 points from stop loss. Let's look at the profit target from this entry point. 200, oh, it easily surpassed 250

[07:07] points, 300, 400 points, so operational that it's really very interesting to do and it does work in day trading. Stormer killing it as always. Here it would have

[07:19] worked again, I'm not even going to do it, it would have worked right after this, oh, where would the entrance be again? Here in this candle, look, at the low of this candle here. Now let's look at this area here. The price has returned. This was the

[07:34] first candle that broke through the moving averages, but it closed down here. This would already be valid for performing the operation. I wouldn't do it . I would do it in this one here. This one definitely closed within the averages. We would put the entrance here, like this.

[07:47] I would position the entrance here. However, the candle in the sequence didn't break above this low level, so there was no entry point. What do we do? This candle closed here. Let's bring the entry point to the low of this candle here. Notice that this candle

[08:03] in the sequence now triggered the sell entry, right? The sale was processed right here. The sale was processed right here. Quiet. Stop loss goes right here on this line. Stop and entry size. Let's see. 98, oh. 100-point

[08:20] stop target. Let's see if it can at least reach the target profit of 200 points. From the target profit of 200 points. From this point on, the sale started, oh there, oh there, there was 100, but it didn't reach 200 points. It wouldn't have been twice the

[08:34] size of the stop loss, but it would have been if you had placed it one and a half times the target stop loss here, which is what I'm advocating here—one and a half times the target stop loss size—then yes, it would have been a profitable exit. The stormer uses twice the size of the stop. I usually use it one

[08:48] size of the stop. I usually use it one and a half times, so given my variation, the output would still be viable in terms of gain. Or, if you leave, people will never let you get there . When they start to recover, they're going to exit the operation; they're not going to

[09:00] let it go back to the pro stop, right? That's the truth. So it's an operational strategy that truth. So it's an operational strategy that really works well, quite well, mini-index here, but this also applies to

[09:13] any asset in day trading. You can try it out; it works really well. It's truly a fantastic thing, and of course, we need to train a lot so we can always be train a lot so we can always be designing an ideal scenario. Nothing here

[09:27] is guaranteed to be correct. Because otherwise it would be fixed income and not variable income, okay everyone? That was interesting. Credits to Stormer, inspired by Stormer, the guy is truly amazing at day trading. It is worth it

[09:40] . Was it interesting? Don't forget to like the video and subscribe to the channel. Here on your screen you'll find more cool operations for you to deepen your knowledge. Click here, and I'm sure you'll like it.

[09:53] and I'm sure you'll like it. Yeah.