The Moving Average Crossover is a good strategy for newbits and pros
The Moving Average Crossover Strategy is a trend-following indicator. This means you place binary option CALL trades in an uptrend and PUT trades in a downtrend. The Moving Average is one of the most important forex indicators for strategies.
The simplest way to indicate a trend is using 2 Moving Averages. The main periods for this are 50 and 100. There are more kinds of Moving Averages. Simple Moving Average (SMA) is the basic average. Exponential Moving Average (EMA), Smoothed Moving Average (SMMA) and Linear Weighted Moving Average (LWMA) are smoothed versions. For trend indication it’s recommend to use Simple Moving Average or Exponential Moving Average. If the Average with period 50 above the 100 the asset is in an uptrend. If the Average with period 50 is below the 100 the asset is in a downtrend at this time frame. An asset can be in an up- and downtrend simultaneously at different time frames. If both Moving Averages get more apart the trend get stronger, if both get closer the trend get weaker. If both lines cross the trend reverse.
For the Moving Average Crossover strategy follow the trend!
If the trend is very strong you can follow them and place a trade in the same directory because at a strong trend you found mostly candle sticks in a direction. But this is a piece of price action and requires advance trading skills. Hence for beginner it’s easier to use Moving Averages for clear trading signals. You need to choose an asset without fast price changes. A very stable asset for example is EUR/USD.
To use this strategy you need 3 Exponential Moving Averages (EMA) with the period 10, 25 and 50. Trade signals get generated if the EMA 10 fast crosses both other EMAs due to the trend changed strong. A faster crossover is better. If a crossover occurred, you have to wait a little bit. A stronger price change get pushed back at stock trades since if the price fall more people buy the asset and if the price raise more people sell the asset. If no price pushback occur it’s a good opposition to place a CALL trade at an upwards crossover and a PUT trade at a downwards crossover.
Keep save by using the Moving Average Crossover strategy!
Don’t forget to keep an eye at you open trades. Maybe the EMA 10 moves back since at price pushback occur later. In this case you can sell your position or fence them to minimalize your lost.
The setup of this strategy needs less setup and can be used by totally trading newbies. But please never trade binary options without testing and train a strategy. You need to learn to see the right entry points and trading signals if a crossover occurred. For this, the platform SpotOption is recommended. They provide demo accounts too. Please contact the support first before you join them to get a demo account and train this strategy to success.