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Testing EMA Indicator for the Currency Pair EUR / USD

Author

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  • Andrea Kolkova

    (University of Business and Law, Czech Republic)

Abstract

The aim of this paper is to verify the effectiveness of EMA indicator according to selected time intervals. The underlying assumption is that, on longer timescales EMA is profitable and provides more relevant signals. The second objective of this paper is to test the signals of indicators in different months. It is believed that in September and January the number of trading signals on this indicator will increase. Testing will be done on the five-minute time frame. The test will be subjected to 65,000 rate values of the EUR / USD currency pair. Effectiveness of the analysis will be evaluated on the basis of digital (binary) option. Business strategy is based on EMA crossover indicator of current exchange rate. By the contribution there were confirmed hypotheses about more profitable signals when selecting a greater timeframe breadth of moving average. There was also confirmed an increased amount of signals in September, but not in January.

Suggested Citation

  • Andrea Kolkova, 2017. "Testing EMA Indicator for the Currency Pair EUR / USD," International Journal of Entrepreneurial Knowledge, Center for International Scientific Research of VSO and VSPP, vol. 5(1), pages 35-40, June.
    • Handle: RePEc:jek:journl:v:5:y:2017:i:1:p:35-40
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    References listed on IDEAS

    as
    1. Zmeskal, Zdenek, 2010. "Generalised soft binomial American real option pricing model (fuzzy-stochastic approach)," European Journal of Operational Research, Elsevier, vol. 207(2), pages 1096-1103, December.
    2. Masatoshi Miyake & Hiroshi Inoue & Jianming Shi & Tetsuya Shimokawa, 2014. "A Binary Option Pricing Based on Fuzziness," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 13(06), pages 1211-1227.
    3. da Costa, Thiago Raymon Cruz Cacique & Nazário, Rodolfo Toríbio & Bergo, Gabriel Soares Zica & Sobreiro, Vinicius Amorim & Kimura, Herbert, 2015. "Trading System based on the use of technical analysis: A computational experiment," Journal of Behavioral and Experimental Finance, Elsevier, vol. 6(C), pages 42-55.
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