Best Combination of Technical Indicators - Stochastic Oscillator, Moving Averages, RSI and MACD Indicators
Best combination of technical indicators PDF - Stochastic Oscillator, Moving Averages, RSI and MACD
Stochastic Oscillator forex indicator can be combined with other indicators to form a Forex trading system - Buy Sell Signal Indicator MT4 Indicators. For our example we will combine it with:
- RSI
- MACD
- Moving Averages
Example 1:
Sell Forex Signal - Best Combination of Forex Indicators
From our Forex trading system the sell forex signal is generated when:
- Both Moving Averages are moving down
- RSI indicator is below 50
- Stochastic heading downwards
- MACD indicator moving downwards below center-line
The sell forex signal was generated when all these forex trading rules were met. The exit forex trading signal is generated when a signal in the opposite direction is generated i.e. when the forex technical indicators reverse.
The good thing about using such a forex trading system is that we are using different types of forex indicators to confirm forex trade signals and avoid as many whipsaws as possible in the process.
- Stochastic - is a momentum oscillator
- RSI- is a momentum oscillator
- Moving Averages- is a forex trend following indicator
- MACD- is a trend following forex indicator
It is very useful to combine more than one forex indicator, as a combination of forex trading signals is better than relying on just a single forex indicator. The forex indicator combinations reinforce each other, and cancel out false whipsaw signals.
A trend following indicator helps a forex trader to see the overall picture, while using more than one momentum forex indicator gives better and more reliable entry & exit points for trading.
Best combination of technical forex indicators and their forex signals help to analyze a lot of the market activity.
Example 2:
Buy Forex Signal - Best Combination of Technical Indicators in Forex Trading
For this example the forex trend is clearly upwards, but at some point there were a few whipsaws generated by the stochastic oscillator indicator, can you spot them? So the question is how can a forex trader avoid trading these forex whipsaws?
Well, the answer is that by looking at the other technical forex indicators such as MACD a forex trader could have avoided the whipsaw, even the MACD indicator had not given a forex crossover trading signal although it was very close to the zero center-line level, at the same time the gradient at which the moving averages turned was not so sharp as to signal a decisive forex trend reversal. The thing is that it’s not so obvious when it comes to recognizing whipsaws; it is a skill that takes some time but after some time you can spot whipsaws after some practice.
One tip is that as long as MACD forex indicator is above zero center-line even if the MACD lines are heading downwards then the forex trend is still upwards. As you can see from the above example MACD forex indicator never went below zero line and afterwards the upward forex trend continued with the MACD forex indicator maintaining above Zero line and continuing to move upwards.
During ranging sideways forex market trends Stochastic Oscillator will give the fastest trading signals which are prone to whipsaws. This is why stochastic oscillator indicator is best combined with other forex indicators and signals traded are confirmed by other one or two other Forex indicators to form - Best Combination of Technical Indicators - Top 10 MT4 Indicators - Combination of Indicators for Forex Trading.
