What’s the Doube EMA Crossover Strategy?

Preliminary preparation

It is necessary to choose the asset, time frame, and expiration time based on the time interval, etc. Also, we need two EMAs with different periods.

We will enter the market upon a signal from these indicators in the form of an intersection of two lines. Moving Average settings:

• slow line: period – 22; color – blue; type – exponential
• fast line: period – 8; color – red; type – exponential

The remaining parameters should be left at the default values.

Signal for options “Up”

The positions of the two exponential moving average lines on the chart indicate which type of trend is currently active. If there is a red (fast) line on top, this signals an upward trend.

When the price moves in the opposite direction then there will be a blue (slow) line on top, and the red one will be moving downwards. The distance between the EMAs shows the intensity of the discrepancy, which in turn indicates the market strength of the current trend.

The optimal entry point for the market is the moment the trend begins. At this time, there is an intersection of the EMAs, when the slow line breaks through the fast one from underneath. At this point, you should open a trade with a view to the asset price rising.

Signal for options “Down”

Entering the market with a trade based on a falling asset price should be done at the very beginning of a downward trend. For this, we will be helped by the EMA lines and their intersection when the fast, red moving breaks through the slow one.

The terms for the expiration of options should be from 2 to 4 candles. For example, on a 15-second and 30-second chart, you can trade short-term fixed 1-minute contracts.

An example of trading the “Double EMA”

We only publish good-quality strategies on our site, the effectiveness of which has been verified by us in practice. Therefore, specifically for this article, we opened one transaction according to the signals described above, screening the process in real time.

We had $275 in our account, which was a real account, rather than a training (demo) account. At the time of writing this article, it was a weekend, so only one asset was available – CRYPTO IDX. This is what we traded.

We configured the trading terminal according to the requirements of the strategy. We waited for the signal. At the moment of the intersection of the lines, signaling the beginning of a downward trend, we bought an option “Down” for $10.

The above picture was taken about a minute after the purchase when there were 27 seconds left before expiration. That’s why the chart clearly shows the behavior of the price after the opening of the transaction.

The trend turned out to be the standard length for this asset, so we got our profit on the trade, which was almost $8. CRYPTO IDX is an asset with a fairly high yield (usually 79% or higher). Therefore, you can make a profit on it even on weekends when the interbank foreign exchange market is not open.

Money management and other nuances

Money management is a set of capital-management rules that allow traders to retain their investment when trading on short-term financial markets, which is associated with high risks.

This is a whole system that must be mastered by all novice traders. However, the basic principles need to be observed immediately. First and foremost, money management prohibits the trading of more than 4-5% of the trader’s account.

Regarding the accuracy of the signals, no signals are 100% or even 90% reliable. Even with the best solutions on the market, this figure reaches a maximum of 75%. Therefore, the inherent quality of a successful trader is the ability to “feel” the market, noticing signs that aren’t visible at first glance. By combining EMA signals with others using candlestick patterns, for example.

One nuance of the “Double EMA” trading strategy is the level of market volatility. The greater the distance between movings before the reversal of the trend and entering the market, the higher the probability that the option will close with a profit. General Risk Warning: Binary options trading carries a high level of risk and can result in the loss of all your funds.