We have already written many times on our web log nearly moving averages. This is probably the virtually pop indicator when it comes to technical analysis. Many strategies are based on it. Today, nosotros are going to draw a method that works well with i-minute binary options.
Contents
-
1
The classic interpretation of moving averages-
1.ane
The endmost price crosses the moving average -
i.2
Using ii moving averages to generate trading signals
-
1.ane
-
2
Strategy for i-minute binary options using SMA(8) and SMA(21)-
2.1
Opening positions for price decreases -
ii.ii
Opening positions for price increases
-
2.1
-
iii
Summary notes
The archetype interpretation of moving averages
Yous probably already know that there are several types of moving averages. Amongst them, y’all volition notice the almost popular ones, similar the simple moving boilerplate (SMA), weighted moving average (WMA), exponential moving boilerplate (EMA). Their classical interpretations are the aforementioned.
The closing toll crosses the moving average
A situation where the closing price is above the moving average is read as a buy betoken. Conversely, if the candle crosses the moving average downward, it is a sell bespeak. This strategy in its simplest course gives many faux signals. Simply look at the chart below and you will see what I am talking nigh.
Using ii moving averages to generate trading signals
Another common technique is to utilize 2 moving averages with unlike periods. Pop pairs of averages are 9 and 13, viii and 21, 10 and 30. In the nautical chart beneath you volition find SMA(viii) and SMA(21). The SMA(8) follows the cost faster than the SMA(21). The signal to buy is when the fast average crosses the slow average upwards. The point to sell is when the fast average crosses the slow average down.
Both of these techniques piece of work. All the aforementioned, it is amend to use them in combination with a set terminate loss and take turn a profit. Binary options, nevertheless, are an musical instrument that does non offer such possibilities. Here we are only assessing whether the market volition go upwards or downwards. Our assessment is verified past the actual direction of the market.
Strategy for 1-infinitesimal binary options using SMA(viii) and SMA(21)
As I mentioned, binary options require a slightly different approach to trading. Nosotros will employ the same averages, SMA(eight) and SMA(21). First of all, they will be used to make up ane’southward mind the existing trend. If the boilerplate is more than than ho-hum, then we are dealing with an uptrend. If the fast average is below the slow average we say that the market is in a downtrend.
The trend is i thing and the moment the position is opened is another. Our strategy is about being clever. If the tendency is downward, we volition attempt to open the pick for price falls.
The place where nosotros will trade is to be clearly expensive in the marketplace. If we have an uptrend, we desire to open an option for the toll increase, merely in a identify where it is extremely cheap. In this style, nosotros accept a chance to reach lx-70% efficiency of our trades. But what does this hateful in practical terms?
Opening positions for cost decreases
Applied examples all-time bear witness the thought of this method. If there is a downwards tendency we wait for the price to exceed the fast average (SMA8) upwards. If this happens, we await for the price to conspicuously suspension through the SMA8.
Some traders will read it equally a buy betoken, merely in such situations, the price usually returns. This is our signal to open a 1-infinitesimal choice for a toll drop. In the chart beneath I present one of the transactions. The red rectangle indicates where it is relatively expensive, which is skilful for opening positions for price drops.
Opening positions for price increases
If nosotros take an uptrend nosotros expect until the price breaks downwards successively SMA8 and then SMA21. Later on, nosotros quickly open the option for the cost increment. Wait at the nautical chart below.
Summary notes
Remember that this strategy, like whatsoever other, does not piece of work every time. In addition, it requires some practice. It is expert to practise it on your demo account.
Using this method, prepare several charts for different currency pairs and attempt to monitor the land of diplomacy in several markets simultaneously. Remember to ready an appropriate expiry time of 1 infinitesimal. Remember also that the method works best when the trend is also visible without the utilize of indicators.
This method may plough out to exist very effective later a few weeks of training and observations. The key to success is a transaction in line with the tendency catching the ends of the corrective move in the existing tendency. Nosotros hope that you will enjoy today’due south strategy. Delight share your thoughts in the comments section beneath.
Nosotros wish you all the all-time!
Source: https://binary.ihowin.com/1-minute-strategy-binary-options/