Last updated: 8 October 2026. Every screenshot below was recorded on 8 October 2026 on an IQ Option Practice account registered in Brazil, on EUR/USD 5-minute candles; the Chart analysis picture in Step 1 was recorded on 5 October 2026. We placed no real-money trade. The tested box shows what the entry rule did on EUR/USD candles recorded between 29 September and 5 October 2026. The strategy is described for 30-minute candles and larger and exits on a signal; our recording has no such candles, so the replay uses fixed-time trades. The result says nothing about what will happen next.
This strategy combines an exponential moving average and the Momentum indicator, both with a period of 20. A Higher (long) signal is the Momentum line crossing zero upward together with a candle closing above the EMA; a Lower (short) signal is the Momentum crossing zero downward together with a candle closing below the EMA. Ideally both happen on the same candle, but a gap of one to three candles is accepted. The strategy is described for 30-minute candles and larger, and exits when the Momentum returns to zero and the candle closes on the other side of the EMA. We replayed the entry on 5-minute EUR/USD candles recorded between 29 September and 5 October 2026, with a fixed trade of 15 minutes: 69 signals, of which 39 won and 29 lost, 57.4% of the decided trades, above the 54.1% needed to break even at an 85% payout but with a 95% interval of 46% to 68%.
Quick answer
- Indicators: an exponential moving average (EMA) with a period of 20 on the price chart and the Momentum with a period of 20 in a panel under it.
- Long: the Momentum crosses zero upward and a candle closes above the EMA, on the same candle or within 1 to 3 candles.
- Short: the Momentum crosses zero downward and a candle closes below the EMA, on the same candle or within 1 to 3 candles.
- Exit as described: the Momentum returns to zero and the candle closes on the other side of the EMA. Our replay used a fixed 15-minute trade.
- Market: it needs a clear trend; it is not suitable for sideways movements.
- Tested: 5-minute candles, 69 signals, 57.4% of the decided trades won; 1-minute candles, 74 signals, 47.3%. Break-even is 54.1% at an 85% payout, and a few days of one pair prove nothing.
How do you set up the EMA and Momentum strategy?
Set the chart
Choose the asset, the chart type and the candle size first: the indicators are calculated from the candles on the chart. The examples in this guide use 5-minute candles on EUR/USD. These steps use the web traderoom on a Practice balance, and the numbers in each screenshot match the numbers in the text. If you do not have an account yet, see how to register.
Step 1: Open Chart analysis
Click the indicators button (1), the wave icon in the chart toolbar at the bottom left of the chart. The Chart analysis panel opens with the tabs Indicators, Templates, Widgets and Scripts. Stay on Indicators.
Step 2: Find the Moving Average
Type “Moving Average” in the Search for indicators box (1) and click Moving Average (2). You choose the exponential type in the dialog.
Step 3: Choose EMA and a period of 20
The dialog opens with a Period of 14 and the Type SMA. Type 20 in Period (1), open the Type list and choose EMA (2), and pick a colour (3) that you can tell from the Momentum line later: the Momentum opens in red, so blue is a good choice. Click Apply (4). The line style box under Thickness can stay as it is.
Step 4: Find the Momentum
Open Chart analysis again, type “Momentum” in the Search for indicators box (1) and click Momentum (2). Six other indicators have Momentum in their name, among them Intraday Momentum Index and Price Momentum Oscillator: choose the plain Momentum.
Step 5: Check the Momentum settings and click Apply
The dialog is a single page. The Period (1) opens at 20, the number of candles back that the close is compared with, which is the period of this strategy. The Source (2) opens at Candle closing and the Line (3) has a colour and a line style. Click Apply (4).
Step 6: Choose the candle size
Click the candle time period button (1) in the toolbar at the left of the chart; it shows the current period, 5m in the picture. In the menu that opens, choose a size (2). The strategy is described for 30-minute candles and larger; the examples on this page use 5-minute candles.
Step 7: Read the two indicators
The EMA 20 is drawn on the price chart (1), here a blue line. The Momentum panel sits under it: the Momentum line (2) moves around the zero line (3), the grey line at 0.000 on the scale. The scale is in price units: 0.001 is 10 pips on EUR/USD.
What does the Momentum show?
The Momentum on the platform is the close of the latest candle minus the close 20 candles earlier, in price units. Above zero the price is higher than 20 candles ago, below zero it is lower. We read the Momentum line and the EMA 20 line off the platform’s chart at 31 candles of one window and compared them with these formulas: the median difference was 0.05 pip for the Momentum and 0.01 pip for the EMA, and the platform draws the point of a candle at its close. The strategy uses the same period of 20 for the average and the Momentum: the EMA gives the direction of the price, the Momentum shows whether the move still has speed, and the aim is to join a trend at an early stage of its formation.
What are the entry rules?
Two conditions must be met together. Written so that every condition is checked on closed candles:
| Part | Usual rule | Our rule for the replay |
|---|---|---|
| Higher (long) signal | The Momentum crosses zero upward and a candle closes above the EMA | Both events on the same candle or within 3 candles of each other; the signal is the later one |
| Lower (short) signal | The Momentum crosses zero downward and a candle closes below the EMA | The mirror of the Higher rule |
| Entry | Not stated; hold until an exit signal | At the close of the signal candle |
| Exit | The Momentum returns to zero and a candle closes on the other side of the EMA | A fixed trade: 15 minutes on 5-minute candles, 5 minutes on 1-minute candles |
Ideally both events fall on the same candle; the set-up is right if they come within one to three candles. The strategy is not suitable for sideways movements. The signals give the exit as well; a binary option has a fixed expiry instead, so the replay holds each trade for a fixed time.
Two signals of the recording, step by step
The first Higher signal and the first Lower signal of the rule on 5-minute candles, in time order, not picked by outcome. All times are the platform clock, which is UTC minus three hours; the date is 29 September 2026. In both pictures the Momentum line lies close to zero, so the crossing is small; the numbers are in the text.
Higher signal, 04:05
The candle that opened at 03:55 closed with the Momentum at -0.25 pip and the candle that opened at 04:00 closed with it at +0.40 pip: the Momentum crossed zero upward (1). That candle closed at 1.13605, still below the EMA (1.136176). The next candle (2) opened at 04:05 and closed at 04:10 at 1.136195, 0.18 pip above the EMA (1.136177), with the Momentum at +1.10 pips. Both conditions held, one candle apart, so the rule says Higher, and the trade opens at that close. A 15-minute trade ends at 04:25, when the candle (3) closes at 1.13555, 6.45 pips lower: it lost.
Lower signal, 04:15
The candle that opened at 04:10 closed at 1.135835, below the EMA (1.136145), while the Momentum was still at +1.20 pips. The next candle (2) opened at 04:15 and closed at 04:20 at 1.13581, below the EMA (1.136113), and the Momentum fell to -0.55 pip: it crossed zero downward (1). Both conditions held, one candle apart, so the rule says Lower, and the trade opens at that close. A 15-minute trade ends at 04:35, when the candle (3) closes at 1.13435, 14.6 pips lower: it won.
The EMA and Momentum rule, tested
We scored the entry on the 1,334 five-minute candles of our recording with a 15-minute trade, and on the 1,505 one-minute candles with a 5-minute trade, entering at the close of every signal candle.
Tested on IQ Option: the EMA and Momentum rule, EUR/USD candles of 29 September to 5 October 2026
| Asset and candles | EUR/USD binary (regular, not OTC): 1,334 five-minute candles (2026-09-29 01:55 to 2026-10-02 20:55 UTC and 2026-10-04 21:00 to 2026-10-05 17:00 UTC); 1,505 one-minute candles (2026-10-02 18:23 to 2026-10-02 20:59 UTC and 2026-10-04 21:01 to 2026-10-05 19:28 UTC). The candles were recorded from IQ Option’s Practice traderoom. The replay places no orders; it only scores the rule on those closed candles, at an 85% payout. |
|---|---|
| Rule tested | The rule on closed candles, the option opening at the close of the signal candle: Higher when the Momentum (20), the close minus the close 20 candles earlier, crosses above zero and a candle closes above the EMA (20), the two events on the same candle or at most 3 candles apart, and the signal is the later one; Lower is the mirror. EMA and Momentum as the platform draws them. The box lists 5-minute candles with a 15-minute trade and 1-minute candles with a 5-minute trade. |
| Signals | EMA 20 and Momentum 20, 5-minute candles, 15-minute trade: 69 signals (35 Higher, 34 Lower) same, 1-minute candles, 5-minute trade: 74 signals (37 Higher, 37 Lower) |
| Outcomes | EMA 20 and Momentum 20, 5-minute candles, 15-minute trade: 39 won, 29 lost, 1 tied; 57.4% of the 68 decided trades won; net +$0.06 per $1 staked at 85% (+$0.09 at 91%) same, 1-minute candles, 5-minute trade: 35 won, 39 lost, 0 tied; 47.3% of the 74 decided trades won; net −$0.12 per $1 staked at 85% (−$0.10 at 91%) |
| Break-even | At an 85% payout a trade needs to win more than 54.1% of its decided trades to break even (1 ÷ 1.85); at 91%, more than 52.4% (1 ÷ 1.91). |
A replay is only a look back at candles recorded on the dates above: it placed no real orders, covers about four and a half days of one pair, and counts overlapping trades as if they were independent. A short test proves nothing about the future, and no profit and no win rate is promised here. IQ Option’s own blog on backtesting says that most strategies need dozens, and often hundreds, of trades before a result means anything.
On 5-minute candles the rule gave 69 signals (35 Higher, 34 Lower): 39 won, 29 lost and 1 tied, 57.4% of the decided trades. Higher trades won 17 of 35 and Lower trades 22 of 34. The 95% interval is 46% to 68%, so the break-even rate of 54.1% lies inside it. On 1-minute candles it gave 74 signals and won 35 of 74, 47.3%. The two candle sizes disagree, and neither is the 30-minute chart that the strategy is described for, where our recording has too few candles to test the rule.
Pros and Cons of the EMA and Momentum strategy
| Pros | Cons |
|---|---|
| Two simple tools that are easy to read. | Both are lagging: the EMA and a 20-candle Momentum follow what the price has done. |
| Gives entry and exit signals. | Our replay could not test the exit rule, only a fixed-time trade. |
| On 5-minute candles the replay won 57.4% of the decided trades. | The interval, 46% to 68%, includes the break-even rate, and 1-minute candles gave 47.3%. |
Common mistakes
- Waiting for the Momentum and the EMA to be on the same candle. The rule accepts a gap of one to three candles.
- Using it in a sideways market. The strategy is not suitable for sideways movements.
- Choosing Intraday Momentum Index or Price Momentum Oscillator. They are different indicators with similar names.
- Mixing the periods. The strategy uses 20 for the average and 20 for the Momentum; the Moving Average dialog opens at 14.
- Taking 57.4% as proof. It is one reading of a few days of one pair.
Related guides
- Momentum on IQ Option and Trading with the EMA
- EMA 20 and EMA 50 and Trading with the SMA 20
- Leading and lagging indicators
- All indicator guides and all strategy guides
Frequently Asked Questions
Q: What is the EMA and Momentum strategy?
A: A strategy that buys when the Momentum crosses zero upward and a candle closes above the EMA, and sells in the opposite case, with both indicators set to a period of 20.
Q: What settings does it use?
A: An exponential moving average with a period of 20 and the Momentum with a period of 20. The Moving Average dialog opens with a period of 14 and the type SMA, so change both; the Momentum already opens at 20.
Q: Which timeframe does it suit?
A: 30-minute candles and larger, as the strategy is described. Our replay used 5-minute and 1-minute candles, because that is what we recorded.
Q: When do I exit?
A: As described, when the Momentum returns to the zero line and a candle closes on the other side of the EMA. On a binary option you choose the expiry instead; the replay used 15 minutes.
Q: Does the strategy win?
A: On 5-minute candles 39 of 68 decided trades won, 57.4%, with a wide margin of error. On 1-minute candles 35 of 74 won.
Q: Does it work in a sideways market?
A: No: the strategy is not suitable for sideways movements.
