Indicator Combination - Stochastic Oscillator, Moving Averages, RSI and MACD Indicators.
Best combination of technical indicators Tutorial - Stochastic Oscillator indicator, Moving Averages indicator, RSI indicator & MACD technical indicator
Stochastic Oscillator technical indicator can be combined with other technical indicators to form a Forex strategy - Buy Sell Signal Indicator MetaTrader 4 Indicators. For our example we will combine it with:
- RSI indicator
- MACD indicator
- Moving Averages Forex Trading Technical Indicator
Indicator Combination Example 1:
Sell Forex Signal - Combination of Indicators for Swing Forex Trading
From our Forex trading strategy the sell signal gets generated when:
- Both Moving Averages are moving down
- RSI indicator is below 50
- Stochastic moving downward
- MACD indicator heading downwards below center-line
The sell signal was generated when all these forex trading rules were met. The exit forex signal is generated when a signal in the opposite direction is generated i.e. When the technical indicators reverse.
Good thing about using such a trading strategy is that we are using different types of technical indicators to confirm forex trade signals & avoid as many whipsaws as possible in the process.
- Stochastic - is a momentum oscillator
- RSI indicator- is a momentum oscillator
- Moving Averages FX Trading Technical Indicator- is a forex trend following indicator
- MACD indicator- is a trend following indicator
It is very useful to combine more than one trading indicator, as a combination of forex signals is better than relying on just a single indicator. The indicator combinations reinforce each other, and cancel out false whipsaw fake out signals.
A trend following technical 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 indicators and their forex trading signals help to interpret a lot of the market activity.
Example 2:
Buy Forex Signal - Combination of Indicators for Swing Trading - Best Indicator Combination
For this indicator combination example the forex trend is upward, but at some point there were a few false signals - whipsaws generated by the stochastic oscillator indicator - So the question is how can a trader avoid these forex trading whipsaws?
The answer is by combining other technical indicators such as MACD indicator, RSI forex Indicator and Moving Averages a trader could have avoided the forex whipsaws, as shown on example above MACD technical indicator had not given a forex crossover forex signal although it was very close to the zero center-line mark, at the same time the momentum at which the moving averages indicators turned was not decisive so as to signal a decisive forex trend reversal.
As long as MACD indicator is above zero center line mark even if the MACD indicator lines are heading downwards then the trend is still upwards. As you can see from the above indicator combination example MACD indicator never went below zero line mark and afterwards the upward trend continued with the MACD indicator maintaining above Zero Centerline & continuing to move upward.
During ranging sideways forex trends Stochastic Oscillator Indicator will give the fastest forex signals which are prone to whipsaws and this is why stochastic oscillator technical indicator is best combined with other indicators and forex signals generated are confirmed using other Forex indicators to form - Best Leading Indicator Trend Indicator and Momentum Technical Indicator Combination - Combination of Technical Indicators for Swing Trading - Trading Indicator Combination - Best Technical Indicators for Trading Strategies.
