The GEEK Strategy of Moving Averages Binary Options 2020

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Trading binary options using a Moving Average crossover strategy

One of the first trading strategies that any new trader will likely learn is some variation of a moving average crossover strategy. The main reason why this is so popular with traders across all assets is that it is both reasonably reliable but ultimately very simply to execute. Binary options traders have successfully employed the crossover strategy in the same way that both forex and stock traders have previously done, allowing for relatively low risk trading and the comfort of a high probability that the trade will be successful.

How to set up the MA crossover trade

If keeping is simple is the golden mantra of trading then this strategy is just about as simple as it gets. The Moving average crossover strategy relies on just two individual indicators in order to generate higher or lower trading signals which can be interpreted as purchasing binary options either short or long. Since Moving averages can vary, choosing the number of bars to be incorporated in the moving average is critical to generating accurate signals. It is generally assumed that binary options traders will need a ‘slow’ moving average such as the 20 or 22MA and a ‘fast’ moving average for which the 5 or 6MA are considered good examples. When these two moving averages are applied to any price chart, on any time frame it is instantly recognisable that they often come together and move apart as the price rises and falls. Looking closely, the MA’s also cross over, with the shorter MA weaving in and out of the slower MA line. It is these crossovers between the slow and fast MA’s which generate the buy or sell signals.

Applying the crossover strategy to binary options

For this strategy to be most effective, binary options traders are encouraged to use the crossovers of the 5MA with the 20MA in order to find potentially profitable trades. It is worth bearing in mind that a moving average is also a ‘lagging indicator’, meaning that it will often be behind the market and therefore the entry signal may occur after the market has moved higher or lower. Whilst it would be ideal to be able to enter the market before an initial move up or down, a quick look at any price chart will show you that price will often stay consistently above or below the entry price as the options expire in the money. Remember, unlike forex trades, we are not looking to find the perfect entry in order to gain as many pips as possible but only for the price to remain above or below the entry price until our options expire.

Tips to make the MA crossover strategy more successful

Some important factors to take in to account when trading an MA crossovers include choosing the correct time frame. Whilst the sixty second binary options may be the most exciting option, this strategy works best with the higher time frames such as the 30 minute or 1 hour charts. Additionally, waiting for a confirmed crossover will mean waiting for the previous bar to close before purchasing options in the direction of the crossover. This is helpful because moving averages are lagging indicators and will only become fixed once the current bar has closed.

The GEEK Strategy of Moving Averages

Are you looking for a moving average strategy for binary options?

One of the easiest ways to trade the forex markets is by using a moving strategy. While this strategy may be simple, the moving average needs to be exponential. This ensures you accomplish the right trades sooner and you squeeze a little more out of the prices. You can improve this system by adding a moving average. In this way, you can measure extremes as well as get information from crossovers. Let’s look at a 30 bar exponential moving average to demonstrate and use 2 time frames, 30 minutes and daily. The moving average will be kept at 30 bars for both time frames.

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We also have a similar strategy using MA, called the Rainbow Strategy:

EMA Rainbow Strategy for binary options

Blue moving average is on top and golden is on the bottom.This strategy uses only one indicator and that is good old Moving Average which you may have already used and know about it. We will use three EMA (Exponential Moving Average) set to 6, 14 and 26 colored differently to determine the trend and […]

Why use a moving average?

Measuring average prices over a period of time is a excellent way to gauge market strength and the current trend. Moving averages allows you to do this and can also be used to create the basis for a technical analysis. Moving averages are also referred to as a rolling mean. When the moving average is plotted alongside current pricing, the data produced measures trend. When prices hit higher levels, the moving average escalates as well and decreases when prices close lower. To ensure the exponential moving average offers value as a current indicator, the older data has less weight than the newer information gained.

So how does it work?

Working on 2 separate time frames and an exponential moving average of 30 days you can begin to pick up trends. The longer time frame will show an underlying trend which can be used as a foundation. When you work on the daily time frame, you can see when the trend is bullish (above the moving average) or bearish (below the moving average). It is important to note, that while this is an indicator, other factors should be taken in to consideration such as the resistance, support and the long term trend. If the price has been above the moving average for quite some time and is nearing it’s long term resistance, be more cautious than if it has just moved above the resistance and is appearing to be on an upward trend.

Once you are sure of the underlying trend and you have ascertained that it is not about to reach a turning point, you can start working on a 30 minute bar chart. After around 10 days you would have a good view of support/resistance and the trend.

When the price moves above the 30 bar exponential moving average on the 30 minute chart, this would be your signal.

It can take quite a few hours to receive confirmation. Check the daily charts before continuing. Limit expiration from 1-4 hours. Signals may not also develop on a daily basis, but you may receive more than one in a single day. Your expiration will be shorter the closer the turning point seems to be. When the market is bullish, once the asset reaches above the 30 bar exponential moving average, this will be the signal to buy. You may miss the first signal and possibly take a loss on the final signal, but the signals in between should make up for it and help you achieve success.

This system works, it is a simple technical analysis which most traders in the current market place and often forms the basis for upper level, more complicate techniques. For amateur traders, this strategy is a good place to start. You need to learn the basics of technical analysis to understand the markets and a moving average system will help you with this skill. You should be able to achieve results on a consistent basis when you apply this strategy properly.

The Geek Simple Moving Average Strategy – Defianly dont Suck!

The Geek reveals his basic strategy for trading popular forex pairs. The strategy focuses on short term moving averages, is trend following and can be used with other indicators. Moving averages are one of the most basic forms of technical analysis and often one of the most reliable.

Simple Moving Average Strategy For Binary Forex Options

This is one of the pillars of my personal trading system and an easy way to trade forex markets. It is a simple moving strategy but does not use a simple moving average. I prefer to use the exponential moving averages because it hugs prices a little tighter and helps you get into the right trades earlier. It is possible to advance this strategy with the addition of the simple moving average. With that addition it is then possible to measure extremes and take signals from crossovers but that is for a different time. Today I am focusing on the simple version of my moving average strategy. For this I am using a 30 bar exponential moving average and two time frames; daily and 30 minute. In each time frame the moving average will remain 30 bars.

Why Moving Averages?

Moving averages are a great way to measure trend and market strength. They measure the average price of an asset over time and can be of any length. They can also be manipulated in many ways, forming the foundations for a large chunk of technical analysis. The moving average, or rolling mean, produces a set of data that when plotted alongside prices measures trend. When prices are tending to close higher the moving average will move up, when prices are tending to close lower the moving average will close down. Using an exponential moving average means that the newest data has the most weight and the oldest data the least. This makes it a more current indicator than a simple moving average where all data points carry the same weight.

How this Strategy Works?

As I said this strategy uses the 30 day exponential moving average and two different time frames. I like to use multiple time frame analysis because it helps to weed out false signals. The first time frame is the longest and this one sets the underlying trend. The trend is your friend and I always like to trade with the trend. So, if on the daily charts the asset is above the 30 bar moving average the underlying trend is bullish. If it is below the 30 day moving average it is bearish. This must be taken under caution though because it is also important to see where price is relative to the longer term trend, support, resistance etc. If price is above the 30 day moving average but has been so for many weeks and the asset is approaching long term resistance I would be more cautious than if the asset had just broken above resistance and was crossing above the 30 day moving average with confirmation.

After determining the underlying trend and checking to make sure it was not too close to a possible turning point you can move down to charts of 30 minute bars. I usually use at least ten days to get a good view of where price is in relation to the past few days and any support/resistance. Assuming that the daily charts were bullish I will need to wait for bullish confirmation here as well.

The signal will be when price bounces from or moves back above the 30 bar EMA on the 30 minute chart. This could take a few hours so patience is key. If it takes a really long time for this confirmation signal to develop I always go back and check the daily charts again before moving on. Some days no signal will develop, some days you will get numerous signals. Typically expiration should be limited to 1-4 hours. The closer the asset is to a possible turning the point the shorter your expiration should be. Assuming bull market conditions any time the asset crosses from below or is above the 30 bar EMA and then pulls back to it is a buy signal. The first signal is hard to catch and the last signal can sometimes result in a loss but there are usually 3-5 good signals in between.

Why this Strategy Doesn’t Suck

This strategy doesn’t suck because it works. It works because it is based on sound, simple and easy to use technical analysis. Analysis used by nearly every trader in the market today. It is also the foundation for more advanced techniques and a great starting point for new traders. Moving averages are one of the pillars of technical analysis and something every trader should know how to use. By properly applying this strategy it is possible to achieve consistent results on a day to day basis.

Why This Strategy May Suck and Conclusion

I don’t think this strategy sucks. I could be wrong. If you think it sucks leave me message or post it in our Binary Options forum and we could talk about it.

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