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Newbies in trading with binary options often want to act in the short term, in order to achieve profits as quickly as possible. Regardless of whether short-, medium- or long-term trades - in any case, a reasonable strategy is required. Without a strategy, the trading of binary options will become pure gambling, and find out other the hoped-for gains will quickly turn into high losses.
This is a strategy that is very suitable for daytraders, but it can also be used to implement medium-term trades. In this strategy, moving averages are used, which is why they will be explained briefly again.
A moving average is used to calculate the average price for the last periods. For all periods, the moving average repeats this calculation. The last periods our official website are used as the calculation basis. In the price chart, the result of each period is displayed in the form of a line (moving average). This line is used in relation to the current price of the Underlying in order to be able to recognize trading signals.
If the number of periods that the moving average requires in the calculation is changed, the behavior of the moving average line changes automatically. A moving average is much more agile if it is based on a few periods. So he stays closer to the current by find price. On the other hand, the slower average will react slower to price movements when longer periods are selected.
In general, the market and moving average will move in the same direction. The moving average will react more slowly if there are changes or the market moves in a different direction. It will then happen that the market crosses the total stranger your line of the moving average, which is a clear trade signal.
If the market crosses the line of the moving average, a purchase signal is generated. In the reverse case, when the market crosses the line of the moving average, a site link see sales signal is generated.
If call and put options are traded here, the trades can be successful. Please note the following:
- If the trend moves sideways, the moving average is crossed several times, resulting in false trading signals.
- Once the moving average has been crossed, the market is not always on the side of the average, although the trend may still be intact.
Market fluctuations can cause another problem, since the line of the moving average can also be crossed in the other direction, which can also lead to a false trade signal
Because of than blog link the aforementioned problems, the following should be considered:
In order to receive a confirmation for the crossing, some periods should be waited. If the market then continues its movement and does not reverse, a trade can be set.
It should also always be waited until the cruising expands. Before a trade is placed, an amount should be set. This amount can be calculated, for example, as a percentage of the price of the respective underlying or as an your website here average of the range of past periods. In order to exclude false signals, the market must cross the moving average by this amount. Only then should the trade be placed.
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Another way to exclude false trading signals is to search for an increasing volume. If it comes to a crossroads and is accompanied by an increasing volume, the trade can be concluded.
In addition, highs and lows can also be used instead of closing prices. website here their For example, in an uptrend, the rule can be introduced that the depth within a period must cross the line of the moving average and not just the closing price. On the other hand, in the reverse case, that is, in a downward trend, the high can be set within a