Exponential Moving Averages in Binary Options


A great indication of market strength is trading exponential moving averages. They also serve as a price trend measure for traders, they reflect the average price of assets as they appear in multiple time frames. This is one of the greatest technical analysis tools once you are familiar with it.

Widely considered to be more powerful indicators as opposed to regular moving averages, the exponential moving average may be controlled at times to make use for technical analysis, whereas regular moving averages tend to view all data as the same. The main reason for this is the data they generate measure trends as it is compared with prices, which is why more recent data is more vital to base trades-off of when using the exponential moving averages.

Using a twenty-four hour chart, assets above a thirty bar is an indication of a bullish trend, below the thirty bar is a bearish trend. The exponential moving average will normally take advantage of a thirty-day average with its association with a set of two timeframes. These frames are never the same and the first timeframe is always longer.

Something to be noted, you have to keep aware of the price of assets as they relate to long-term trends. If the price has been above the moving average for long periods of time, it indicates a resistance to take place in the near future.

After observing the trends and determining that they will not likely hit a resistance, you should refer to the thirty-minute bars, looking back over the past two weeks to see if you can determine if there is support and resistance levels over the last couple days that are verified. If there are indications of a bullish trend, then that is a good time to make a purchase when the asset prices come from below, to cross a bar, or have been above it and needs to lower a bit.

You can trade very gainfully when you use an exponential moving average, once you are able to successfully utilize and read it.

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