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So IQ Option recently added a new trading instrument, FOREX. And I’m excited to bring to you my first Forex trading tutorial.
In this video, we are going to look at a basic trading pattern in forex on IQ Option. It is basically about determining the trend and using it to predict price movements.
We will use candlesticks with time interval: 30 minutes. We will use the following indicators: EMA – Period 21 (Red), EMA – Period 13 (Red), WMA – Period 5 (Light Blue), and the Awesome Oscillator (Periods 34 and 5).
Here’s how it works. When the blue line is below the two red lines, and they are all moving downwards, we have a downward trend. When the blue line is above and the three lines are moving upwards, we have an upward trend.
We can tell whether the trend will change or remain the same just by how much the three lines are spread apart. If the lines appear to be diverging (spreading away from each other) or are far apart, the trend is likely to continue and this is a good time to open a position (by simply clicking “buy” if the trend is upwards or “sell” if the trend is downwards).
So here, the blue line is below the two red lines and we can see that they are spreading apart. We can also see an array of red bars (we only need at least two) below the zero line on the Awesome Oscillator. Clearly, we have a steady downward trend and this is a good time to open a position. In this case, we open a “sell” position. This is referred to as “going short”, (similar to a put option in binary trading).
In the case of an upward trend, we were going to open a “buy” position. This is referred to as “going long”, (similar to a call option in binary trading). Looks like our prediction was correct. If we close the position now, we get $75 profit from our initial investment of $50.
Conversely, if the lines are converging or moving close to each other, it means the trend is weak and the best at that point is to wait.
Be sure to set a realistic target profit and maximum loss, and stick to the plan. Otherwise you might as well consider yourself gambling. If you hit your target profit, don’t get too excited and expect the profit to grow further. Close the position immediately. In like manner, if you hit your maximum loss, don’t keep waiting and hoping for things to get better. That miracle might never show up. So we now close the position at a profit of $50.3, about 100% of our investment of $50.
Let us now look at a “buy” signal. The blue line is above the other two, and we can see that they are spreading apart. We just need at least two green candles and at least two green bars above the zero line on the Awesome Oscillator. Clearly, we have an upward trend and it looks like it’s going to go on for some time. This is certainly a good time to go long.
And… we were right again! We’ve closed the position with a profit of $47.73 from our initial investment of $100.
You can try Iq Forex here: https://goo.gl/zqk5gV
Music:
“Motherlode”
Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0
http://creativecommons.org/licenses/by/3.0/