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