Best Leading Indicator Trend Indicator and Momentum Indicator Combination
Best combination of indicators PDF - Stochastic Oscillator indicator, MAs indicator, RSI indicator and MACD indicator
Stochastic Oscillator indicator can be combined with other indicators to form a trading strategy - Buy Sell Signal Indicator MetaTrader 4 Technical Indicators. For our example we'll combine it with:
- RSI
- MACD indicator
- MAs Technical Indicator
Indicator Combination Examples 1:
Sell Gold Day Signal - Best Combination of Indicators for Day Gold Day Trading
From our strategy the sell signal gets generated when:
- Both MAs are moving down
- RSI indicator is below 50
- Stochastic heading downwards
- MACD indicator heading downwards below centerline
The sell signal was generated when all these day trading rules were met. The exit day trading signal gets generated when a signal in the opposite direction is generated i.e. When the indicators reverse.
The thing about using such a day strategy is that we are using different types of indicators to confirm signals and avoid as many whipsaws as possible in process.
- Stochastic - is a momentum oscillator
- RSI- is a momentum oscillator
- MAs Indicator- is a trend following indicator
- MACD indicator- is a trend following indicator
It's very useful to combine more than one day indicator, as a combination of day signals is much better than relying on one single indicator. Technical indicator combinations reinforce each other, & 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 1 momentum technical indicator gives better and more reliable entry & exit points for trading.
Best combination of indicators & their signals help to analyze a lot of market activity.
Example 2:
Buy Signal - Best Indicator Combination
For this technical indicator combination examples the trend is upward, but at some point there were a few false signals - whipsaw fakeouts generated by the stochastic oscillator technical indicator - So the question is how can a trader avoid these day trading whipsaw fakeouts?
The answer is by combining other indicators such as MACD technical indicator, RSI xauusd trading Indicator and MAs a trader could have avoided the trading whipsaws, as shown on the example above MACD technical indicator had not given a xauusd trading cross-over signal although it was very close to the zero centerline mark, at the same time the momentum at which the moving averages indicators turned was not decisive so as to signal a decisive trend reversal.
As long as MACD is above zero center line mark even if MACD lines are heading downwards then the trend is still upwards. As you can see from the above indicator combination example MACD day 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.
Duringranging sideways trends Stochastic Oscillator Indicator will give the fastest signals which are prone to whipsaws and this is why stochastic oscillator indicator is best combined with other day indicators & signals which are generated are confirmed using other indicators to form - Best Leading Indicator Trend Indicator and Momentum Indicator Combination - Best Combination of Indicators for Day Trading Gold - Best XAUUSD Indicator Combination - Best Indicators for Day Strategies.
