What is the Exponential Moving average?
Exponential Moving Average = Closing price * multiplier + EMA ( previous day ) * ( 1 – multiplier )
Exponential Moving Average (EMA) is a type of technical analysis indicator used to measure the momentum and average price of a security over a specific period of time. It is calculated by taking the average price of a security over a specific number of periods and then weighting it exponentially more towards the most recent prices.
The indicator is a type of technical analysis indicator used to estimate the trend and the average price of a security over a specific period of time. It is calculated by taking the average price of a security over a predetermined number of periods and then weighting it exponentially more towards the most recent prices.
How to Trade with Exponential Moving average on IQ Option?
The Exponential Moving Average (EMA) is a type of technical indicator that smoothens the price action of an asset by creating a continuous line. The primary purpose of this indicator is to show the direction of the trend and its intensity.
Trading with EMA on IQ Option can be done in two easy steps. Firstly, you need to open an IQ Option account and select the asset or market you want to trade. Then, you need to set up your EMA indicator on your trading chart. Click on the ‘Indicators’ tab and then search for moving average and set the type as EMA.
We need to set two EMA lines. so, set the first EMA line with period 7 and change the colour of the indicator line to the green. make sure to increase the thickness of the line for better visibility.
Similarly, set one more EMA line with a period of 15 and make sure to change the colour and thickness of the indicator line.
Place buy trade with the Green line at the bottom
Given above is the 15 min chart of GBP USD, and when the green line is below the red line and later the green line ladder up above the red line is the best time to place a buy trade for 15 mins.
Place Sell Trade with the Green line at the top
Similarly, When the green line is above the red line it signals an upcoming bearish trend. however, the best time to place a sell trade is when the green line intersects and ladders down the red line at the bottom.
So, this is the end of this article and I hope you have found this article helpful. I will suggest you try this trading strategy on the IQ Option demo account and shift to a real account once you are confident enough.