How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option

How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option
The Exponential Moving Average (EMA) is a moving average indicator. Moving Average indicators are trend-following indicators which smooth out price data creating a line that follows the trend.

Many traders opt for the EMA over the Simple Moving Average. The reason for this is that EMA reduces lag by placing more weight on the most recent prices. For example, when using a 30 period EMA the weight is placed on prices over more than 30 days.
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This material is not intended for viewers from EEA countries. Binary options are not promoted or sold to retail EEA traders.


How to Set up the EMA indicator in IQ Option

After logging into your IQ Option account, set up your Japanese candles chart.
How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option
Next, click on the indicators feature and then select moving averages. Next, select the Moving Average.
How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option
On the moving averages window, select a period greater than 10 (for a more accurate EMA). Next, change the type to EMA. On IQ Option, the default color for the EMA is orange. Finally, click on apply to save the settings.

In our first example, well trade using the 14 period EMA and 28 period EMA. Youll need to repeat the set up procedure twice to create the two EMA lines. For the EMA 28 change the color to yellow. For the EMA14 change the color to green. Remember to click on apply when youre done.


Trading IQ Option using EMA14 and EMA28

When trading using the EMA14 and EMA28, your objective is to identify where the two indicators cross each other as well as the distance between them as they track the prices.
How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option
When the EMA28 crosses under the EMA14 and the distance between them is wide, its a signal for a strong uptrend. The prices are above both indicators.You should enter a buy position. As the gap narrows, the uptrend is almost exhausted.

When the EMA28 crosses over the EMA14 and the gap between them widens, its an indicator of a strong downtrend. Here, the prices are below both indicators. You should enter a sell position.

When both indicators run through the prices, the markets are ranging. At this point, its best to sit on the sidelines and wait for a trend to develop.


Trading IQ Option using the EMA30

How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option
Another commonly used EMA is the 30 period EMA. Its usually used to identify a developing trend. In the chart above, youll notice a developing uptrend.

But you dont know exactly where to enter a buy position. The EMA30 can be used for this. Right where the EMA30 cuts the price (bullish candle) from above and runs below the prices, this is your entry point.

Now lets take a look at a trend reversal to bearish.
How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option
In a bullish trend, the EMA30 indicator runs below the price. In the image above, you can see the indicator cut across a bearish candle and starts moving above the prices. This is a good place to enter a sell position.

The EMA indicator is one of the simplest ways to identify a developing trend and trend reversals. Simply looking at the position of the EMA line relative to the prices will tell you whether the trend is up or down. In addition, once the EMA cuts through the price, its a signal that the trend is reversing.

Remember I mentioned EMA with periods greater than 10 provide better accuracy? This makes EMA indicators best for trading longer time frames.

(RISK WARNING: YOUR CAPITAL MIGHT BE AT RISK)

Forex Strategy with EMA and Momentum Indicators

The system of technical indicators EMA and Momentum is well proven in the trend trading on Forex. Instruments work well with any assets on timeframes of 30 minutes or more. However, traders got the best results using the EMA + Momentum trading strategy with popular currency pairs (EURUSD, GBPUSD, USDJPY and USDCAD) on H1-H4 timeframes.
How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option

How to apply the EMA + Momentum trading strategy in IQ Option platform?

Trader needs to select an asset, set a timeframe and run indicators in trade room to start trading with EMA + Momentum strategy. How to connect the EMA and Momentum indicators to the chart can be found by clicking on the links.

The main parameters of strategy:
  • Asset: EURUSD currency pair
  • Timeframe: H1-H4 (in the example, H4 will be adopted)
  • Moving Average indicator: period 19; EMA type
How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option
Indicator settings Moving Average

Momentum Oscillator: period 18; source is candle closing
How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option
Momentum Oscillator Settings


How to trade with EMA + Momentum strategy?

Trader needs to learn how to recognize signals to profitably open a trading positions using the indicator system:
  • buy signal: the Momentum oscillator line intersections zero level upwards, and the candle on the chart closes above the EMA line;
  • a signal to close a long position: the Momentum oscillator line has returned to zero level, and the candle on the chart closes below the EMA line;
How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option
  • sell signal: the Momentum line intersections zero level downwards, and the candle on chart closes below the EMA line;
  • a signal to close a short position: the Momentum oscillator returned to zero level, and the candle on chart closes above the EMA line.
How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option
Deal that is made at a sell signal


Summary

This text describes all the conditions for applying the EMA + Momentum trading strategy. This system of indicators is popular with traders with different levels of training, since there is no need for special knowledge. Traders will be able to trade profitably on the IQ Option platform due to simple requirements and reliable signals from the strategy. However, users must stop trading, choose a different currency pair with trends, or use other instruments in the event of sideways movement. So this strategy is not effective during a flat.
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(RISK WARNING: YOUR CAPITAL MIGHT BE AT RISK)
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Source: IQ Option Trading Blog - iqtradingblog.com | How to Trade With Exponential Moving Average (EMA) Strategy in IQ Option - https://iqtradingblog.com/how-to-trade-with-exponential-moving-average-ema-strategy-in-iq-option-1000124
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