As we all know, Forex and Binary options go hand in hand and for that reason I constantly check the most important Forex trading forums for new strategies, with a lot of hype behind them just for reviewing purposes and most of them have some things in common: Being sick of all the systems mentioned above, I decided to bring you one of the most simple and, in my opinion, a potentially profitable system: You can find it here, free and with detailed explanation: It uses just three Exponential Moving Averages EMA , with periods of 10, 25 and 50 and the signal to trade is given when the 10 period EMA Exponential Moving Average goes through both the 25 period EMA and the 50 period EMA.

If the 10 period EMA crosses upward both the other two EMAs, we choose Call and if it crosses them down, we choose Put. As we all know, almost none of the Binary Options brokers offer a charting package and absolutely no Technical Analysis can be conducted without a charting package so step one is getting our hands on one of those.

It is pretty simple, but for this we will have to adventure into the Forex jungle.

Once you have downloaded MetaTrader 4 MT4 , open a currency pair chart some brokers offer commodities, precious metals, etc, but we will stick to currencies for this explanation and then plot on that chart the three EMAs needed for the strategy.

The main purpose of the Moving Average is to smooth out price action and to offer us a visual aid in identifying price direction. They also serve as Dynamic Support and Resistance I say Dynamic because they move and change according to price movement. For example, if I use a 20 period Moving Average, it will be drawn on the chart using the average value of the closing price of the last 20 candles. And now I have two more things to tell you; one is bad and the other is really good.

Let me give you some examples: Exponential Moving Averages EMA , Smoothed Moving Averages SMA , Linear Weighted Moving Average LWMA and also some exotics like Triangular Moving Average, Hull Moving Average or Adaptive Moving Average. All you need to do is select the appropriate Moving Average in our case, Exponential Moving Average by clicking on Insert upper left side of MT4 — Indicators — Trend — Moving Average.

You will be given a choice of types of Moving averages and you should select Exponential, with a period of 10 and then repeat the procedure once for the 25 EMA and once for the 50 EMA. For this strategy we use EMA Exponential Moving Average because its formula places more weight on the last candles in the calculation, thus making it more responsive to price action.

Do Adaptive Moving Averages Lead To Better Results?

Here are two pictures of what you should see on your screens:. Ok, now that everything is in place, we just have to wait for the conditions of the system to be met and then select Call or Put accordingly.

Remember, the 10 EMA must cross both the other two down for a Put and vice versa for a Call. In our example above, the red 10 period EMA crosses down the other two so we should select a Put. The first thing I want us to focus on is that this is not a trend following system in its most basic form.

The entry is triggered by a change of the current direction of price, thus a counter trend move for the 10 EMA to cross both the other two EMAs, price must definitely change direction. However, once the EMAs are aligned the way we need them and we are in a trade, we are trading in the direction of the newly formed trend until they cross again.

Hull Moving Average - Forex Trading Indicators

Given that the move that generated the EMA crossover can be just a retracement of the prevailing trend, this strategy can be risky sometimes. On the other hand, if it is not a retracement, due to the lagging nature of the Moving Averages, we can open the trade late sometimes and miss out on a big part of the action.

I can strongly state that it is not a scam. Nobody looks for any financial gains if we use the system, it is posted on a free website and the indicators used are common to any trading platform. However, one of the things I like most is the fact that it can give big profits, while the losses are kept relatively low. Share, Discuss and Read more about Fast Moving Averages Crossover System on BinaryOptionsthatSuck. Thanks for the great info hr, but one question thou i.

Can somebody tell us how the binary option works? Even casino is more predictable! There is a great series of tutorial videos on financial trading at http: These videos helped me out a lot when I first started trading binary options.

With a little practice you can learn to recognise the reversals you talked about and use them to your advantage. Why was a trade allowed at What system was this trade on??

SMA or EMA? Which Moving Average is Best? - Nadex

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Exponential Moving Average (EMA)

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