As the name implies, the Rainbow Oscillator indicator displays 100 oscillator values with ascending lookback periods, as opposed to moving averages as seen in the Multiple Rainbow Filter.
Indicator Description
The default Rainbow Oscillator indicator lookback period for the SMI minimum K period is set to 28, increment 2, minimum smooth period 6 and increment smooth to 1. You may change the default periods as per user preference. If you set the increments 1 and 2 to 2 and 4 for the default Stochastics Momentum Index (SMI), the oscillator values will increase accordingly, i.e. SMI14/SMI16, SMI18/SMI20, SMI20/SMI24… until SMI206/SMI404, SMI208/SMI404 and SMI210/SMI408
Other than the SMI, Rainbow Oscillator comes with the option to use the following indicators as input:
- Awesome Oscillator
- Double Stochastics
- MACD
- Stochastics
- Stochastics RSI
- TSI
The above oscillators come with separate options for calculating the values.
When using the overbought / oversold Rainbow Oscillator readings you should manually adjust the:
- Oversold threshold upwards during strong uptrends
- Overbought threshold downwards during strong downtrends
The Library also feature the Multiple Rainbow Filter in the Trend Analysis category.
Other Library Indicators
You may combine the Rainbow Oscillator with a number of other Library tools. The Session Tools category include a number of Support / Resistance indicators, namely the Daily Pivot-, Weekly Pivot-, Monthly Pivot- and N-Monthly Pivot- levels. Other than the standard Pivot Levels, the library also contains Hourly Pivots, Rolling Pivots Daily, Rolling Pivots Weekly and Rolling Pivots Monthly. Additional information on trading with Pivot Points and the use of rolling pivots for trend detection. Another tools to be considered for determining support / resistance include the average daily range levels. Specifically, our Indicator Spotlight discussed the Daily Range Projections and the Weekly Range Projections / Monthly Range Projections are also available from our Volatility Indicators category.
For Volume / Range Analysis you may have a look at the Force Index, Relative Volume or Relative Ranges.
Apart from the Rainbow Oscillator, the advanced oscillators category features a number of other indicators, including the Connors RSI, Laguerre RSI and the SVE Stochastics IFT. The momentum oscillator category furthermore features the Know Sure Thing indicator and new an improved versions of the standard Relative Strength Index, the Slow RSI, Stochastic RSI and the Traders Dynamic Index (TDI). Additional info on the TDI indicator, which applies the RSI to three timeframes, was also discussed our Indicator Spotlight. Finally, if you use an oscillator that do not apply a fixed scale, you may review our indicator spotlight on the Z-score and normalization.
The Rainbow Oscillator is available for NinjaTrader 8.
