The combination of the 8-period Simple Moving Average (SMA) and the 200-period Exponential Moving Average (EMA) is a popular technical analysis strategy among traders for identifying short-term momentum within a broader trend. The 8 SMA is responsive to recent price action and is often used to spot short-term trading opportunities.
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In contrast, the 200 EMA is a long-term trend indicator that helps traders define the overall market direction. When used together, these two moving averages can create a powerful system for aligning trades with the dominant trend while capturing shorter-term moves.
One common approach with this strategy is to look for a buy signal when the price is above the 200 EMA (indicating an overall uptrend), and the 8 SMA crosses above the price or bounces upward after testing the 8 SMA. This setup suggests that short-term bullish momentum is aligning with the longer-term trend, increasing the probability of a successful trade. Conversely, when the price is below the 200 EMA and the 8 SMA acts as resistance (price failing to stay above it), it could signal a good opportunity to enter a short position.
Traders often add confirmation signals such as candlestick patterns, volume analysis, or momentum indicators like RSI to reduce false signals and improve trade accuracy. Additionally, it's crucial to implement risk management rules, including stop losses and proper position sizing, when using this strategy. While no system guarantees success, combining a fast-moving average like the 8 SMA with a slow trend filter like the 200 EMA can help traders stay on the right side of the market and reduce emotional decision-making.
We're currently in our 13th year helping traders become successful in the live markets so we know a thing or two about leveraging a small account into serious wins.
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Risk Disclaimer:
Trading options involves financial risk and may not be appropriate for all investors. The information presented here is for information and educational purposes only and should not be considered an offer or solicitation to buy or sell any financial instrument. Any trading decisions that you make are solely your responsibility. Past performance is not necessarily indicative of future results.
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In contrast, the 200 EMA is a long-term trend indicator that helps traders define the overall market direction. When used together, these two moving averages can create a powerful system for aligning trades with the dominant trend while capturing shorter-term moves.
One common approach with this strategy is to look for a buy signal when the price is above the 200 EMA (indicating an overall uptrend), and the 8 SMA crosses above the price or bounces upward after testing the 8 SMA. This setup suggests that short-term bullish momentum is aligning with the longer-term trend, increasing the probability of a successful trade. Conversely, when the price is below the 200 EMA and the 8 SMA acts as resistance (price failing to stay above it), it could signal a good opportunity to enter a short position.
Traders often add confirmation signals such as candlestick patterns, volume analysis, or momentum indicators like RSI to reduce false signals and improve trade accuracy. Additionally, it's crucial to implement risk management rules, including stop losses and proper position sizing, when using this strategy. While no system guarantees success, combining a fast-moving average like the 8 SMA with a slow trend filter like the 200 EMA can help traders stay on the right side of the market and reduce emotional decision-making.
We're currently in our 13th year helping traders become successful in the live markets so we know a thing or two about leveraging a small account into serious wins.
Open Account: http://pocketoptioncapital.com
Risk Disclaimer:
Trading options involves financial risk and may not be appropriate for all investors. The information presented here is for information and educational purposes only and should not be considered an offer or solicitation to buy or sell any financial instrument. Any trading decisions that you make are solely your responsibility. Past performance is not necessarily indicative of future results.
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LearningTranscript
00:00In this video, I'm going to be showing you the best ever binary options moving average crossover
00:05trading strategy that will make you a lot of money. I'll be showing you how to set the moving
00:10average indicators up and I'll be showing you how to trade this strategy effectively.
00:14Now before we get straight into setting up the moving average indicators, I'm just going to
00:18briefly touch on what the moving average indicator is and what it is used for. Now basically the
00:23moving average indicator is used to help smooth out price data by creating a constantly updated
00:28averaging price. So therefore it really helps filter out the noise from random short-term price
00:33fluctuations such as this example you see on screen right here. So what we can see in this example is
00:39short-term bearish divergence in a long-term bullish uptrend. Now in this example here we've got a
00:45short-term price fluctuation but no crossover between the two moving averages making this a non-valid
00:51entry. So now that you know the basics of the moving average indicator, what it is and what it is used
00:56for, we can go ahead and apply the moving average indicators to our chart. Now in order for us to
01:01apply the moving average indicators to our chart, you want to go to the indicators icon right next to
01:06chart type and time frame. Now once you've clicked on that, you will see in the third column, fourth
01:11from bottom is the moving average indicator right over here and you want to click on that twice.
01:15Now we're not done yet. Before we start trading, what we need to do is change a couple of settings in
01:20the moving average indicators. So in order to change the settings in the moving average indicator,
01:25what you're going to want to do is click on the pencil in between the eye and the cross in the
01:29first moving average indicator. Now what we're going to do here is we're going to change the period
01:33to eight and we're going to leave the moving average as SMA. Now once you've done that, we're
01:38going to change the line color to red and now that that's all set, you can click on save. Moving on to
01:43the next moving average indicator. Same thing, you're going to want to click on the pencil in between
01:47the eye and the cross in the second moving average indicator. Now this one is a little different.
01:52We're going to be changing the period to 200 and the moving average to EMA. So period 200,
01:58moving average EMA. Now in styles, we're going to keep the line color green, but we're going to
02:02change the line width to two. Now once you've done that, you can click on save. So now that the moving
02:07average indicators are set up, we're all set and ready to trade. Listen, man, it's very important
02:12for you to note that we'll be trading on the one minute timeframe only trading three minute
02:17positions, one minute timeframe, three minute positions. Now I'm going to get into a couple of
02:21examples on how to trade this strategy and how to start making money. Now this trading strategy is
02:27so simple and easy to trade. If you guys can follow instructions, you can make a lot of money. Now to
02:33enter a position, all that we have to wait for is the eight SMA crossing above or below the 200 EMA.
02:40It's that simple. Like in this example, we have the eight SMA crossing above the 200 EMA indicating a buy
02:47entry on this candlestick over here. As you guys know, one minute timeframe only, three minute positions.
02:53So had we entered a position on this candlestick over here, the position or trade would have closed on this
02:58candlestick and that would have been beautiful profit. And here we have an example of the eight SMA closing below the
03:04200 EMA on this candlestick over here. As you guys know, each candlestick represents one minute.
03:09So had we entered a sell position on this candlestick over here, the trade would have closed on this
03:14candlestick right over here. And that would have been a beautiful, beautiful profit once again.
03:19Here we have another example on the euro to US dollar. As you can see, the eight SMA closes below
03:24the 200 EMA on this candlestick over here. So we'd be entering a sell position and the trade would have
03:30closed over here. It's another beautiful trade. It's a beautiful day, man. So that's pretty much the
03:35basics of this strategy. Now I'll be showing you two ways that you can trade this strategy. Now this method
03:42is for new traders or amateurs that are less confident. So if you are a new trader or someone
03:48that is less confident, I highly recommend this method. So using this method, you want to identify
03:54the long-term trend of the market. And the way you can do this is by going to the 15 minute chart
03:59and checking whether the eight SMA is above or below the 200 EMA. So if the eight SMA is above the 200 EMA,
04:07you only want to take buy trades. And if the eight SMA is below the 200 EMA, you only want to take sell
04:15trades. Now, if the market is consolidating, like in this example, you don't want to open any trades
04:21at all. So once you've identified the trend on the 15 minute timeframe, you can go back to the one
04:26minute timeframe. And by identifying the long-term trend in the market, this can really help you with
04:31your technical analysis. And it can also help you make better trading decisions. But remember,
04:36using this method requires a lot of discipline. Now, the second method is for more experienced,
04:42confident, optimistic traders. And this method involves trading both directions,
04:47no matter the trend of the market. And you'll find that this method is far more riskier,
04:51but provides a lot more trading opportunities. At the end of the day, whichever method you use to
04:57trade the strategy, I strongly recommend only opening one to three positions per day. Because if you
05:04over-trade and you open way too many positions, you'll find that you'll end up losing a lot more
05:09money than you'll be making. So now that I've shown you guys the nitty gritties of this trading strategy,
05:14I'm going to jump into a few live trades just to show you how good this trading strategy really is.
05:34That's a good part!
05:37So
05:41you
05:42know,
05:44you
05:45the
05:46and
06:34Three out of three, baby.
06:55That's how we do it, man.
06:56We made our profit for the day.
06:58We'll come back again tomorrow, but that's how simple it is to trade this strategy.
07:02But yeah, I hope you guys enjoyed the insight into this strategy.
07:06Go check it out.
07:06Let me know what you think.
07:07And as always, smash a like on this video, subscribe to the channel if you are new, and
07:12I'll see you in the next one.