[FAQ] What is the best parameter for SMA?

One of the most common ways to imply SMA (Simple Moving Average) in trades are using multiple SMAs at the same time and trade the crossover. In my strategies, I would normally use 3 SMAs which is call the Rainbow Strategy. The following parameter is what I think is suitable for binary option trading.

SMA1: 7
SMA2: 13
SMA3: 100

How does it work?

When using multiple SMAs, traders would use the long term SMA (SMA3: Yellow) to identify a trend direction. And to trade at the crossover of the 2 short term SMAs (SMA1: 7 & SMA2: 13) when they gives out a signal that matches with the trend direction. Very simple strategy, and perfect for beginner to get a hand on trend direction and trend reversal. Take a look at the following video to find out more about the strategy!

Rainbow Strategy: https://youtu.be/FzK4u_oASRU

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