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Combining Stochastics with Different Types of Technical Gold Indicators


This topic should be called: Combining Stochastics with other Indicators, but Stochastic XAUUSD System sounds real nice.



Stochastic Oscillator xauusd indicator can be combined with other xauusd indicators to form a xauusd system. For our example we will combine it with:

  • RSI

  • MACD

  • Moving Averages


Example 1: XAUUSD Trading Stochastic Trading System


Sell XAUUSD Signal Generated using XAUUSD Trading Stochastic Trading System

Sell XAUUSD Signal Generated using XAUUSD Trading Stochastic Trading System


From our xauusd system the sell xauusd signal is generated when:

  1. Both Moving Averages are moving down

  2. RSI is below 50

  3. Stochastic heading downwards

  4. MACD moving downwards below center-line


The sell xauusd signal was generated when all these xauusd rules were met. The exit xauusd signal is generated when a signal in the opposite direction is generated i.e. When the xauusd technical indicators reverse.



The good thing about using such a xauusd system is that we are using different types of xauusd indicators to confirm the xauusd trade signals and avoid as many xauusd whipsaws as possible in the process.



  • Stochastic - is a momentum oscillator xauusd indicator

  • RSI- is a momentum oscillator xauusd indicator

  • Moving Averages- is a xauusd trend following xauusd indicator

  • MACD- is a xauusd trend following xauusd indicator


It is very useful to combine more than one xauusd indicator, as a combination of xauusd signals is better than relying on just a single xauusd technical indicator. The xauusd indicator combinations reinforce each other, and cancel out false whipsaw xauusd signals.



A xauusd trend following indicator helps a xauusd trader to see the overall picture, while using more than one momentum xauusd indicator gives better and more reliable entry & exit points for trading xauusd.


The xauusd indicators combinations and their xauusd signals help to decipher a lot of the xauusd market activity.

Example 2: XAUUSD Trading Stochastic Trading System

Buy XAUUSD Signal Generated using XAUUSD Trading Stochastic Trading System

Buy XAUUSD Signal Generated using XAUUSD Trading Stochastic Trading System


For this example the xauusd trend is clearly upwards, but at some point there were a few xauusd whipsaws generated by the stochastic oscillator xauusd indicator, can you spot them? So the question is how can a xauusd trader avoid trading these xauusd whipsaws?


Well, the answer is that by looking at the other technical xauusd indicators such as MACD xauusd indicator a xauusd trader could have avoided the whipsaw, even the MACD indicator had not given a crossover xauusd 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 warrant a decisive xauusd market xauusd trend reversal. Well the thing is that it’s not so obvious when it comes to recognizing xauusd market whipsaws; it is a skill that takes some time but after some time you can spot whipsaws from a mile away.


One tip is that as long as MACD xauusd indicator is above zero center-line even if the MACD lines are heading downwards then the xauusd trend is still upwards. As you can see from the above example MACD xauusd indicator never went below zero line and afterwards the upward xauusd trend continued with the MACD xauusd indicator maintaining above Zero line and continuing to move upwards.


During ranging xauusd markets Stochastic Oscillator xauusd indicator will give the fastest xauusd signals which are prone to whipsaws. This is why stochastic oscillator indicator is best combined with other xauusd indicators and the xauusd signals traded are confirmed by another one or two other XAUUSD indicators.

 

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