{"id":4025,"date":"2021-05-11T00:57:36","date_gmt":"2021-05-11T00:57:36","guid":{"rendered":"https:\/\/iqtradingpro.com\/?p=4025"},"modified":"2021-05-11T00:57:36","modified_gmt":"2021-05-11T00:57:36","slug":"trend-trading-strategy-ema-indicator-iq-option","status":"publish","type":"post","link":"https:\/\/iqtradingpro.com\/trend-trading-strategy-ema-indicator-iq-option\/","title":{"rendered":"A trend trading strategy with EMA indicator in IQ Option"},"content":{"rendered":"

For beginners who are not fully equipped with chart reading knowledge, the simplicity factor is at the forefront. For that simplicity, we should look to popular, easy-to-use indicators. If you are still learning about the world of options, then I think a trading strategy using EMA indicator for trend trading will work for you.<\/span><\/p>\n

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What is EMA indicator?<\/h2>\n

EMA is one of the two most commonly used Moving Averages (MA).<\/span><\/p>\n

EMA belongs to a group of indicators that are very popular in technical analysis. It helps to determine the weights of the most recent data. With that calculation, it will help to make the path more accurate than other MAs.<\/span><\/p>\n

This means that EMA will respond more quickly and accurately to a change in the price action of a particular currency pair. EMA is an important part of many traders’ strategy. Because it can be combined with other technical indicators to bring high efficiency<\/span><\/p>\n

\"What
What is EMA indicator?<\/figcaption><\/figure>\n

Characteristics of the EMA<\/h2>\n

The EMA is a better trend follower because it has a higher weight for the latest data and has faster changes compared to the SMA.<\/span><\/p>\n

The rising slope of the EMA reflects the optimistic sentiment of the market. On the contrary, if it is reduced, this represents a pessimistic and fearful sentiment.<\/span><\/p>\n

The relatively narrow time frame of observation makes the EMA sensitive to price movements. That means it soon catches the trend but makes you easily get trapped. Traps are a quick reversal of the market.<\/span><\/p>\n

EMAs with longer time frames of observation create fewer traps but abandon more reversal points. Therefore, it is necessary to choose a time frame that suits your trading strategy.<\/span><\/p>\n

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Characteristics of the EMA<\/figcaption><\/figure>\n

What are the advantages of EMA over SMA?<\/h2>\n

The EMA indicator has a remarkable advantage over the SMA. Let’s take a look at some of its advantages.<\/span><\/p>\n

First, it allocates a greater weight to the most recent trading day. That means the crowd’s nearest sentiment is of utmost importance.<\/span><\/p>\n

Second, the EMA is always up-to-date as it constantly updates new price data. It helps investors to keep abreast of price movements at that moment. Hence, the current price using the EMA will not be affected much by historical prices.<\/span><\/p>\n

\"Advantages
Advantages of EMA over SMA<\/figcaption><\/figure>\n

Principles to know when using the EMA indicator<\/h2>\n

EMA is a useful and preferred indicator for short-term traders. They often look at the indicator and make quick decisions on their trades. The EMA works independently and you can combine it with any other tool to complete the overall picture of your strategy.<\/span><\/p>\n

Before determining the path of the EMA indicator, you need to know how to understand its language. There are a few principles with this exponential moving average as follows:<\/span><\/p>\n