Pocket Option Moving Average
Pocket Option is the safest, most convenient, and fastest terminal that combines a concise design, an intuitive interface with a choice of several languages, and wide functionality for organizing a competent and efficient Binary Options trading process.
Pocket Option Moving Average
In our previous articles, we have repeatedly talked about the main functionality of the Pocket Option trading platform, shared with you the best “earning money” strategies using the example of trading with an economic calendar’s help.
Of course, the financial calendar provides excellent reasons to invest, but it should be noted that it must not be your only source of signals, since there are various cases where you can’t rely solely on fundamental analysis.
In the case of short timeframes, for example, you need technical analysis strategies based on indicators, like Stochastic or Moving Average.
Pocket Option Moving Average
In other words, in order to be successful in trading, it is desirable for a trader to expand his ‘functionality pool’ as much as possible through the use of various trading indicators and strategies.
In today's article, we will talk about one of the most important and frequently used indicators in technical analysis - the Moving Average indicator.
What is Moving Average?
Moving Average (MA) is a trend indicator, which is a curved line that is calculated based on price changes.
With the help of numerous indicators and their combinations, a good trader can:
- With a high rate of probability determine a trend or flat movements
- Find opportunities to open and close positions on time
Accordingly, the moving average is the trader's assistant, which confirms the trend.
On the chart, it looks like a curving line that repeats the price movement, but more smoothly.
The vast majority of strategies use a simple moving average.
As a rule, it is set by default, unless otherwise specified in the conditions of the trading system.
Let us consider in more detail the types of MA and examples of strategies
Types of Moving Averages
Moving Averages can be either “uptrend” (showing how the uptrend has formed in a growing asset) and as a result, in this case, it confirms the trend.
Or it can be quite opposite - Moving Average can also confirm the “downtrend” of a particular asset.
Moving Average: indicator features
At each point, the MA value is an average price indicator for a certain time period.
The period is the main parameter of the indicator; it determines how many timestamps will be taken into account when determining the moving average parameter.
There are 4 main types of MA:
Simple, where its values are the simple arithmetic average of price changes.
This one is called SMA - Simple Moving Average
Exponential, where the latest values have a predominant weight.
“Weight” is calculated as an arithmetic progression.
Linear weighted, where the latest values take precedence, but the weight is calculated exponentially.
And finally, “Smoothed”, where the latest values have a higher priority, while price values that are outside the period are also taken into account (though their influence is insignificant).
Add Moving Average to Pocket Option
Adding this indicator to a trading platform chart is quite simple.
This can be done by selecting the "Indicators", and then choosing the "Moving Average" indicator in the "Insert" tab of the top menu, or similarly through the corresponding icon on the toolbar.
Setting the properties of the Moving Average indicator
To configure the indicator, you need to right-click on the indicator and then select the "Properties" tab.
When adjusting the Moving Average indicator settings, there are certain parameters at your disposal:
- MA method (MA type, e.g. Simple, Smoothed, Exponential, etc)
- MA style (color, thickness) is also selected
MA indicator settings
Also in the properties, you can choose to display it on specific timeframes.
For example, as part of a trading strategy, only 14 MA are needed on the H4 and H1 charts, then you need to specify the appropriate data in the settings:
Setting up timeframes in Moving Average
In order to display a simple moving average on a chart, you need to select the Moving Average tool in the general list of platform indicators.
After that, a settings window will open, in which you must select "Simple" in the "MA Method" field.
The remaining settings are set depending on the conditions of the trading strategy (hereinafter referred to as the TS).
Moving averages are closely related to cycles
For example, the most well-known futures market cycle consists of 22 days, which is approximately a calendar month.
The larger cycle is twice as long as the 22-day cycle, and the smaller cycle is 2 times shorter.
It is from here that the popular periods of moving averages appeared 22, 11, 5.
For long-term trends, traders often use the 39-week or 200-day moving average.
In general, analysts suggest using the following formula to calculate the ideal moving average:
Cycle Length +1)/2
The moving average is also widely used to determine support and resistance levels along curves.
DISADVANTAGES OF THE MOVING AVERAGE
The smoother and longer the Moving Average chart, the more it lags behind the price chart.
And if you use short timeframes, then there is a possibility of many fake signals being displayed.
Traders have to carefully navigate, taking that into account when using MA in their trading strategies (especially in short time frames).
Moving Averages are a very well-known and useful indicator.
Though it should be noted that if a certain tool is used by many traders, then the competitive advantage and potential profit decrease.
How much can you earn on Pocket Option?
If we move on to the logical continuation of the topic, then we will come to the question of how much you can earn on binary options.
Under the terms of the deal, you get a fixed profit of 70-85%. Next, you need to pay attention to the ratio of successful and unsuccessful trades.
The goal of each investor is to find a strategy, type of asset, a method of making investment decisions that will lead to the least number of unsuccessful transactions.
For example, the financial calendar provides excellent reasons for investment, as it is full of events and provides investors with a lot of information on all the shares that Pocket Option has in its assets.
If we assume that you make 2 successful trades per day, investing $50 in each and making a profit of $35, then on the first day with an initial capital of $100, you will earn $70 with an average 70% profit per trade.
If you manage to work in this way for 20 days a month, then your profit will be $1400, although your initial capital was only $100.
HOW TO BECOME SUCCESSFUL ON POCKET OPTION
It might be a cliche, but you should develop your own trading strategy.
Without it, the path to success will be winding and long. Consider how much time per week you will devote to theory, and when you obtain a chance, you can practice on a demo account or at least on a real account with a relatively small deposit (Pocket Option does provide a Demo Account option).
Practice on a demo account, but get to the real one asap.
Many experienced traders emphasize that when working on a demo for a long time, a person gets used to the absence of risk, as they never get out of their comfort zones.
The longer a person trades on a demo, the more difficult it is for him to switch to a real trading account later.
To become a successful binary options trader, you will need all your perseverance.
Success does not come immediately, first, you need to work hard and it is better to be ready for this right away.
Practice! Practice is very important. You can study a large number of books, subscribe to the various traders’ Youtube channels, but this will not lead to anything if you do not put the acquired knowledge into real, damn practice.
Focus on one thing at a time. There are a huge number of different indicators and strategies, bloggers, and so on.
No need to spread out, choose what you think might be suitable for your character and stick to it.
To begin with, determine who would you consider to be the one you’d look up to in a trader community, the person who has already achieved what you are striving for.
Next, you need to study the materials that this person will advise, and also try to master his strategies.
Since he is already successful, it means that it makes sense to adopt his experience.
May the force be with you, young padawan.