MA with ADX – 5 Min Binary Options
Moving Average Cross Strategy with ADX
Moving average crossover is one of the widely used strategies to predict market trends. This strategy includes two moving averages – a fast-moving moving average and a slow moving one.
When the fast Moving Average crosses over the slow Moving Average, a short-term uptrend may occur.
When the fast Moving Average crosses below the slow Moving Average line, a short-term downtrend may occur.
For trading Binary Options with IQ Option, Expert Option, and Olymp Trade with 1 to 5-minute expiry, we can use this Moving Average Crossover strategy. It works well in a trending market. It does not give good results in a ranging market.
With help of ADX (Average Directional Movement Index), we can avoid the crossover during low volatility or ranging market. When ADX value is above 25 and Moving Average Crossover takes place, then only consider entering a trade.
The ADX graph with a positive slope (increasing ADX value) gives an increased success rate than a declining ADX value.
Moving Average ADX – SELL Signal
Consider a SELL with 5-minute expiry on a 1-minute chart, when Exponential Moving Average (7) crosses below the Exponential Moving Average (14), and ADX value in increasing and above 25.
Moving Average ADX – BUY Signal
Consider a BUY with 5-minute expiry on a 1-minute chart, when Exponential Moving Average (7) crosses ABOVE the Exponential Moving Average (14), and ADX value in increasing and above 25.
How to set up MA ADX strategy on IQ Option, Expert Option, or Olymp Trade Platform
Moving Average Crossover Strategy with ADX works well with all brokers – IQ Option, Expert Option, or Olymp trade. The indicators setting up process is almost the same for all the brokers.
It is quite simple to set up the indicators on the chart.
Step 1: Select Moving Average Indicator, set Period to 7, and Type to EMA (Exponential Moving Average) and add it to chart. Select green color for this EMA 7 indicator.
Step 2: Again, select Moving Average Indicator, set Period to 14, and Type to EMA (Exponential Moving Average) and add it to chart. Select yellow color for this EMA 14 indicator.
Step 3: Now, select the ADX indicator, which is also known as the Average Directional Movement Index. It indicates the strength of the trend. You can use it along with the Moving Average crossover to find the correct entry and exit.
ADX value below 24 can help you avoid taking trades during a nontrending market and a value above 24 indicates a strong trend in the market.
Conclusion – EMA 7 and EMA 14 with ADX works
Moving Average Cross with ADX value above 24 gives a higher success rate for Binary Options trading from 1 to minutes expiry. You can practice applying this strategy in a Demo trading account before going live trading.
You can increase your success rate further by avoiding BUY trades near resistances and SELL trades near support areas.
The information provided here does not constitute a recommendation to carry out any financial transactions. While using the information you are solely responsible for your own decisions and assume all risks associated with the financial results of such transactions.