SMA or you can call it Simple Moving Average is one of the most widely used technical indicators that is used by traders to identify the upcoming trends and reversals.
This indicator uses a simple mathematical calculation that helps traders identify and analyse the security price over a specific period of time.
Calculation
The Simple Moving Average is calculated by adding up the security’s average closing price over a specific period of time.
Suppose you want to calculate the Simple Moving Average of the last ten candles. Now, you need to add up the closing price of the last ten candles and then divide it by ten.
How to find and set a Simple Moving Average on the Pocket Option?
In order to find and set the Simple Moving Average on Pocket Option just follow the steps below.
Step 1: Log in to your Pocket Option account. In case, you don’t have one click here
Step 2: Set your default chart to candlestick after clicking the chart button at the top of the page
Step 3: Select the desired currency you want to trade.
Step 4: Click on the indicator button at the top of the page
Step 5: Search for the moving average name in the list
Step 6: Next set the type as SMA from the drop-down menu.
Step 7: Apply the necessary changes and once you are done click apply.
How to trade with the SMA indicator on the Pocket Option?
There are two methods of trading with the SMA indicator on the Pocket Option.
Single Simple Moving Average: You can easily identify the trends using a single SMA or Simple Moving Average when the price intersects the moving average line it generates buying and selling opportunities for the traders. When the price intersects above the moving average line it signals an upcoming bullish trend and vice versa when the price intersects below the moving average line It signals a bearish trend.
Dual Simple Moving Average: You can even use a dual Simple Moving Average. When the two Moving Average line intersects each other it generates buy and sell signals and traders can use the opportunity to place high-quality trades. When a short-duration Simple moving average intersects above the longer-duration Simple moving average it signals a bullish trend and vice versa, when the short-duration Simple moving average intersects below the longer-duration Simple moving average it signals a bearish trend.