Simple trend following strategy with the EMA and the CCI

Trade with the trend, you can often hear. This is a good piece of advice, really, because trading along with the trend can not only provide many profitable opportunities but it is also a safer option than to trade against the current trend. In order to open a position, you have to identify the trend first and then find the good point to open a transaction. Today I will present a method of doing it which combines two indicators, the Exponential Moving Average and the Commodity Channel Index.

Chart preparations

The first thing you have to do is to log in to your IQ Option account. Next, you should consider what type of asset you are going to trade during the session. Choose the type and the timeframe of your chart. Then, add the indicators needed.

Click on the Indicators icon and add moving average and CCI. The moving average will need some adjustments. The CCI will use default settings.

The EMA period should be set for 50 and the CCI for 14.

The EMA + CCI trading strategy

The EMA is used for trend identification. The CCI oscillator provides signals to enter the trade. How to trade with the strategy that combines the EMA and the CCI?

Opening the long position on IQ Option

You are trading along with the trend. That is why you will look for opportunities to open a long position during the uptrend. To identify the uptrend you should look at the candles and the EMA. The candle should cross the EMA line and close above it. This gives you a hint there is an uptrend in the market.

Now, you are waiting for the signal from the CCI oscillator. Its line should cross the line of value 100 to the top. Hold the position opened for the length of 3-4 candles.

You do not open a new position until another crossing of the candle and the EMA takes place even if the CCI is above the 100 line.

Opening the short transaction

To open a short transaction you want the market to be in the downtrend. To assure this is the case, check whether the candle crosses the EMA and closes below it.

The signal from the CCI is obtained when the line of the oscillator crosses the -100 line on its way down. Enter the short trade and keep it open for 3-4 consecutive candles.

Final words

The trading strategy with the use of the EMA and the CCI is quite simple. You just need to observe the EMA in order to identify the trend and then wait for the signal from the CCI which comes when the 100 (or -100) line is crossed.

You can experiment with different periods settings. You should increase the EMA period when using the shorter timeframes. The best is to leave the CCI period at 14, however, you can also try different ones. Do not exceed, however, the value 24.

IQ Option has a free demo account in its offer. You can practice there any new strategy or new settings for the well-known method. Come back whenever you need to. This is the place where you cannot lose your money because this account is supplied with virtual currency. Nevertheless, you cannot earn real money either. So shift to the live account when you feel ready.

Good luck!