Trade Forex Trading

Best Combination of Indicators - Stochastic Oscillator, Moving Averages, RSI & MACD Indicators

Best combination of indicators Guide - Stochastic Oscillator Trading Indicator Technical Indicator, Moving Averages, RSI & MACD

Stochastic Oscillator Technical indicator can be combined with other trading indicators to make a Forex system - Buy Sell Signal Indicator Meta Trader 4 Technical Indicators. For our examples we will combine it with:

  • RSI
  • MACD
  • MAs Indicator

Example 1:

Stochastic Strategy - Buy Sell Signal Indicator Meta Trader 4 Indicators

Sell Trade Signal - Best Combination of Indicators

From our system the sell trade signal is generated when:

  1. Both Moving Averages are heading down
  2. RSI indicator is below 50
  3. Stochastic heading downwards
  4. MACD indicator heading downwards below centerline

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

Good thing about using such a trading system is that we are using various types of indicators to confirm trade signals & avoid as many whipsaws as possible in the process.

  • Stochastic - is a momentum oscillator technical indicator
  • RSI- is a momentum oscillator technical indicator
  • MAs Forex Indicator- is a price trend following technical indicator
  • MACD- is a price trend following technical indicator

It's very useful to combine more than one fx indicator, as a combination of signals is better than relying on just one single forex indicator. The forex technical indicator combinations reinforce each other, and cancel out false whip saw fake out trading signals.

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

Best combination of technical indicators and their signals help to interpret a lot of market activity.

Example 2:

Whipsaws and Stochastic Strategy - Combination of Indicators for Forex Trading

Buy Trading Signal - Best Combination of Indicators in Forex Trading

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

Well, the answer is that by checking-on the other technical indicators such as MACD a forex trader could have avoided the whip saw, even the MACD 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 signal a decisive forex trend reversal. The thing is that it’s not so obvious when it comes to recognizing fake outs: it is a skill that takes some time but after some time you can spot whipsaw fakeouts after some practice.

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

Duringranging sideways forex market trends Stochastic Oscillator Trading Indicator will give the fastest signals which are prone to whipsaws. This is why stochastic oscillator is best combined with other indicators and signals traded are confirmed by other one or two other technical indicators to form - Best Combination of Indicators - Top 10 MT4 Indicators - Combination of Indicators for Forex Trading.

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