EMA and Stochastic

• VFX Blog
• Estratehiya

This method of trading on binary options shows stable profitability on almost all instruments of the Forex market and includes signals of the adaptive strategy vfxAlert and technical indicators that have been tested by several generations of traders. The strategy is simple and accessible even for beginners, the indicators used are present in all popular trading platforms. The Stochastic oscillator will give the first signal to change the trend, and the moving averages as a more lagging instrument will confirm the opening of the option. 

Characteristics of the strategy

How to trade

Adjust indicators in your trading system:

Exponential Moving Average (EMA):

• Period = 14 (1 EMA);

• Period = 9 (2 EMA);

Stochastic:

• Period %K = 13;

• Period %D = 3;

• Smoothing = 3;

Signal conditions:

• CALL: Stochastic is above level 20 and its graph is directed upwards and the current candle closes above the moving averages.

• PUT: Opposite conditions: Stochastic below level 80, the candle is closed below the middle.

How to open the position:

The optimal entry point will be the first candle that closes above or below the moving averages and properly moves Stochastic, which must be paid special attention - it must necessarily exit overbought (80) or oversold zones (20). On the M1 chart period, you can open the position on the second candle if the first is missed, but better to wait for the next signal.

Expiration time:

Not less than 3-5 candles working timeframe 

Some bits of advice:

• This strategy stably makes a profit on most currency pairs, but it's better to choose currencies according to the current trading session: the EUR/USD and GBP/USD are practically not moving into the Asian session, so short-term options will only lead to losses. And NZD/USD and AUD/USD are active in the Asian session;

• Beginners have to open options only after crossing the moving average graph! You always want to catch the whole trend with a few deals in a row, but it's better to wait for the signal at the intersection. Never open the position if vfxAlert shows strong opposite signal.

• Special attention to the release of strong fundamental news and statistics! Usually do not recommend trading in these periods, as the market is unstable and technical analysis is no longer working. But in reality, if the news trade goes on a one-minute timeframe, it is quite possible to open an option in the direction of the news with confirmation from the adaptive strategy vfxAlert.

Stochastic: