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Many traders are searching for an effective and simple strategy that would help them make profitable trades. For beginners it is also very important to understand all the actions they do on the market.
We’d like to present you the Moving Average Trading Strategy. This method will help you to analyze the price chart and to make the right trade decisions.
This strategy is based on two lines, which are called “Moving Averages”. They show the movement of the price without random fluctuations. These lines will show you the direction of price movement so you can see the trend clearly and make a profit of it.
So, why using two lines? The idea is to wait until one of them crosses the other. Then you will get a clear signal to buy or sell a binary option.
To start using this strategy you will need a window with technical analysis. You can easily find one on the OLYMPTRADE platform.
Open the chart of the financial instrument you are going to trade. We recommend you to choose EUR/USD, EUR/JPY, GBP/USD or Gold. The best time for trading will be during the European session (from 09:00 to 12:00 by Moscow time) or American session (from 15:00 to 19:00 by Moscow time). When the market is not active, it’s better not to use this strategy (usually from 20:00 to 08:00 by Moscow time).
So, open the chart with a time period of 1 minute.
Select Moving Average from the list of available indicators.
Use the following settings for this line (we will call this line “slow”):
Length = 60
Source = hl2
Offset = 0
Add another moving average on the chart. This time use the following settings:
Length = 5
Source = hl2
Offset = 0
Now we are ready to start trading! As we remember, the blue line is slow and the green line is fast. Once these lines cross each other, you’ll know it’s time to open a binary option up or down. Use 5 minute time frame. This is the optimal time which will help you to make profit from the arising trend without much risk.
You should trade “Down” when the quick Moving Average line (the green one) crosses the slow Moving Average line (the blue one) from the TOP to the BOTTOM.
You should trade “Up” when the quick Moving Average line (the green one) crosses the slow Moving Average line (the blue one) from the BOTTOM to the TOP.
As you can see from our example, the chart constantly forms signals to open profitable trades. Note that you should not start trading until one of the lines have crossed the other.
It will not be long before you learn how to use the chart and notice good opportunities for trading. Good luck!
DISCLAIMER: Futures, stocks and options trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, stocks and options may fluctuate, and, as a result, clients may lose more than their original investment. The impact of seasonal and geopolitical events is already factored into market prices. The highly leveraged nature of futures trading means that small market movements will have a great impact on your trading account and this can work against you, leading to large losses or can work for you, leading to large gains.
If the market moves against you, you may sustain a total loss greater than the amount you deposited into your account. You are responsible for all the risks and financial resources you use and for the chosen trading system. You should not engage in trading unless you fully understand the nature of the transactions you are entering into and the extent of your exposure to loss. If you do not fully understand these risks you must seek independent advice from your financial advisor.