ADX and EMA strategy IQ Option

I want to present to you the ADX strategy that is based on two indicators ADX and EMA. Many traders are interested in digital options only because they think options are a fast way to earn big money. Well, you have to be always prepared for the worst scenario, that is that you will not always win but sometimes lose. Good strategies are helpful to keep the balance.

Key TakeawaysπŸ”‘

β†’The 60 seconds ADX strategy is a combination of the ADX and EMA indicators.
β†’Utilizing this strategy may help traders identify entry and exit points for short-term trades.
β†’Remember to practice risk management and never invest more than you can afford to lose.

60 seconds ADX strategy that combines ADX with EMA

We will start by preparing a chart with a set of indicators needed to generate trading signals. The chart should be set for the 1-minute timeframe and the expiration period should be 60 seconds.

EMA

EMA stands for the Exponential Moving Average. To add this indicator to the chart you have to click on the indicators feature icon and find the EMA among the indicators. After you select it, the line of the EMA will appear on your chart. For the demands of our strategy, the period should be set for 28. You can adjust it by clicking on the pen icon next to the indicator's name. You can also change the colour and the thickness of the EMA line.

Moving average needs to be 28-period EMA
Moving average needs to be the 28-period EMA

ADX

ADX is the Average Directional Movement Index invented by J. Welles Wilder Jr. You add it to the chart the very same way you did with the EMA.

Adding ADX to 1-minute chart
Adding the ADX to a 1-minute chart

Then you adjust the parameters. The default period is 14. For our strategy to work you should change it to 5.

We will use 5-period ADX
We will use the 5-period ADX

What is an ADX crossover?

You will see three lines of the indicator. The ADX line itself shows the strength of the trend. The other two lines called +DI and -DI are the lines of the bullish and the bearish movements. They show us when to enter and leave the trade.

ADX indicator on IQ Option
The ADX indicator on IQ Option

What is the best setting for the ADX indicator?

Usually the best indicator settings are the default ones. It is the same with ADX. Today's strategy, however, is to catch quick market moves in 1-minute trades. Therefore, here we have decided to shorten the default indicator period from 14 to 5.

Opening a CALL position with 60 seconds EMA ADX strategy on IQ Option

There are a few conditions that must be fulfilled in order to open a CALL option. They are as follows:

  • The green line of ADX is moving above the red line
  • The price intersects the EMA28 and moves above it
  • The signal candle's body represents the upward trend
  • The signal will be more accurate when the previous candle's body is also a bullish one.
ADX strategy CALL signal
Bullish candle crosses the EMA and +DI is above -DI – open CALL

Pros and Cons of the 60 Seconds ADX Strategy πŸ’‘

Pros Cons
βœ… Can be effective in capturing short-term price movements. ❌ Not suitable for all market conditions, such as low volatility or ranging markets.
βœ… Works well for traders who prefer quick trades and fast profits. ❌ Involves a higher risk due to the short trade duration and potential for rapid losses.
βœ… Relatively simple to understand and implement for traders. ❌ Requires discipline and strict adherence to the strategy to be effective.

Important Factors to Consider When Using the 60 Seconds ADX Strategy πŸ“Š

Factor Description
Timing Choose the right time to trade, considering market conditions and volatility.
Risk Management Implement appropriate risk management strategies, such as setting stop losses and using proper position sizing.
Discipline Stick to the rules of the strategy and avoid making impulsive decisions.
Practice Test the strategy on a demo account before using it with real money to gain experience and confidence.
Adjustments Be prepared to make adjustments to the strategy based on your performance and evolving market conditions.

Opening a PUT option with 60 seconds EMA ADX strategy on IQ Option

The conditions that must be met when you wish to open a PUT option are as follows:

  • The red line of ADX is moving below the green line
  • The price intersects the EMA28 and continues below it
  • The signal candle's body represents the downward trend
  • The signal is considered to be much stronger when the previous candle's body was also a bearish one.
ADX Strategy PUT signal
Bearish candle crosses the EMA and +DI is below -DI – open PUT

These are the simple rules to follow if you want to use the EMA and ADX strategy. Remember to set the chart for a 1-minute period and that this strategy works for 60 seconds trades.

Do not waste time. Launch the IQ Option platform and see how today's ADX strategy performs in your favourite markets. Share with us any comments you have on the above strategy.

Good luck!

Frequently Asked Questions about the 60 Seconds ADX Strategy πŸ“Œ

  • Q: Can I use this strategy for longer trade durations?
    • A: This strategy is specifically designed for 60-second trades, but you can try adjusting the parameters to suit longer durations.
  • Q: How can I improve the accuracy of the signals generated by this strategy?
    • A: Consider using additional indicators, such as RSI or Stochastic Oscillator, to confirm the signals generated by the EMA and ADX.
  • Q: Is this strategy suitable for beginners?
    • A: While the strategy is relatively simple to understand, beginners should first practice on a demo account before trading with real money.
  • Q: Can I use this strategy for trading other financial instruments?
    • A: This strategy can potentially be applied to other instruments, such as forex or commodities, with the appropriate adjustments.
  • Q: How can I minimize losses when using this strategy?
    • A: Implement proper risk management techniques, such as setting stop losses, using appropriate position sizing, and limiting the number of simultaneous trades.

GENERAL RISK WARNING

The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
Kindly note that this article does not provide any investment advice. The information presented regarding past events or potential future developments is solely an opinion and cannot be guaranteed as factual, including the provided examples. We caution readers accordingly.

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Bart Bregman

Author / IQ Option expert: "My name is Bart Bregman, I have 9 years of full-time professional trading experience. I've been trading with IQ Option for more than 7 years, mainly on the shorter time frames doing technical analyses, and have many experience with Binary Options, CFDs, Options, and Crypto trading. There is no such thing as a bad trade! As a digital nomad trader, I'm mostly traveling all over the world. Follow my journey on Instagram at https://www.instagram.com/bart_bregman/. "

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