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 indicator can be combined with other technical indicators to form a Forex system - Buy Sell Signal Indicator MetaTrader 4 Indicators. For our examples we will combine it with:
- RSI
- MACD
- Moving Averages FX Trading Technical Indicator
Example 1:
Sell Forex Signal - Best Combination of Forex Indicators
From our Forex trading system the sell trading signal is generated when:
- Both Moving Averages are moving down
- RSI indicator is below 50
- Stochastic moving downward
- MACD indicator heading downwards below centerline
The sell trading signal was generated when all these forex trading rules were met. The exit forex trading signal is generated when a signal in opposite direction is generated i.e. When the technical indicators reverse.
Good thing about using such a forex trading system is that we are using different types of indicators to confirm forex trade signals & avoid as many whipsaws as possible in the process.
- Stochastic - is a momentum oscillator
- RSI- is a momentum oscillator
- Moving Averages forex trading indicator- is a trend following indicator
- MACD- is a trend following indicator
It is very useful to combine more than one indicator, as a combination of forex trading signals is better than relying on just a single indicator. The technical indicator combinations reinforce each other, and cancel out false whip saw fake out trading signals.
A trend following indicator helps a trader to see the overall picture, while using more than one momentum technical indicator gives better & more reliable entry & exit points for trading.
Best combination of technical indicators & 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 trend is clearly upward, but at some point there were a few whipsaws generated by the stochastic oscillator indicator, can you identify them? - So the question is how can a trader avoid trading these forex whipsaws?
Well, the answer is that by looking at the other technical technical indicators such as MACD a trader could have avoided the whip saw, even the MACD technical indicator had not given a forex cross-over signal although it was very close to the zero centerline level, at the same time gradient at which the moving averages turned was not so sharp as to trading signal a decisive 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 indicator is above zero center-line even if the MACD lines are heading downwards then the trend is still upwards. As you can see from the above example MACD indicator never went below zero line and afterwards the upward trend continued with the MACD technical indicator maintaining above Zero line and continuing to move upwards.
During ranging sideways 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 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.
