Pocket Option offers a wide range of tools for trading binary options using various strategies. In practice, however, it is best to start with a demo account. This option is available on Pocket Option as well, letting you test your chosen strategy without risking real money. Once you are ready, you can move on to live trading. Beginners with no prior experience in binary options are particularly recommended to start with a moving average crossover strategy.
Also, remember that you can start trading with additional funds by using promo codes for account top-ups from Pocket Option, and boost your results with this strategy by using a promo code to cancel loss trade $10.
What Are Moving Averages and How Are They Calculated?
The Simple Moving Average (SMA) has been used by traders for several decades. Despite its age, it remains a popular indicator today. On the trading terminal screen, the SMA appears as a smooth line running through, above, and below the price chart.
The indicator was originally used in the stock market and later adopted for other financial assets. The SMA line is plotted using the average closing prices of a consecutive series of candles.
For example, if the period is set to 20 in the Pocket Option terminal, the Moving Average is calculated from the closing prices of the 20 most recent candles. Each new point on the indicator shifts the calculation window by one: the oldest candle is dropped and the next one is added.
To set the SMA period, go to the corresponding section, open the "Active" tab, and click the pencil icon next to the indicator.
Rules for Trading on Pocket Option Using SMA
An SMA-based strategy is well suited for trading turbo options on Pocket Option. Despite the higher risks involved, it can generate significant returns in a short period of time.
To apply this strategy, add two Moving Averages with periods of 60 and 4, respectively. It is recommended to use different colors to distinguish the two lines. Set the timeframe to 15 seconds and the contract expiration time to no more than one minute.
Within this strategy, open a Call option when the moving average with a period of 4 crosses the SMA with a period of 60 from below.
Put options are opened in the opposite situation: when the shorter-period moving average crosses the longer-period line from above.
Using two SMAs, traders can achieve solid returns on short-term contracts. However, because of the short timeframe, signals appear very frequently, and some will be false. It is therefore important to follow sound money management principles and consider using the Martingale method.
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See Also:
- Free Robot for Pocket Option
- Pocket Option Broker Platform for Windows
- How to Use Social Trading with the Pocket Option Broker
- How to Trade Express Orders with the Pocket Option Broker
- Pocket Option Broker Affiliate Program
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