Stochastic Oscillator Indicator, MAs, RSI & MACD.

Best combination of indicators Tutorial Course - Stochastic Oscillator Technical, Moving Averages, RSI & MACD

Stochastic Indicator can be combined with other indicators to form a system - Buy Sell Signal Indicator MetaTrader 4 Trading Indicators. For our examples we will combine it together with:

RSI
MACD
MAs Moving Averages Trading Indicator

Example 1:

Stochastic System - Best Combination of Indicators PDF Index Trade

Best Combination of Indicators

From our indices system the sell signal gets derived and generated when:

Both Moving Averages are moving downward
RSI is below 50
Stochastic heading downwards
MACD heading downwards below centerline

The sell signal was derived/generated when all the rules were met. The exit trading signal is generated when a trading signal in the opposite trend direction is generated ie. When indicators reverse.

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

Stochastic - is a momentum oscillator indicator
RSI - is a momentum oscillator indicator
MAs Indicator- is a market trend following indicator
MACD- is a market trend following trading indicator

It's very helpful and useful to combine more than one trading technical indicator, as a combination of signals is better than relying on 1 single indicator. The trading indicator combinations re-inforce each other signal, & cancel out false fake out trading signals.

A trend following indicator helps a indices trader to see the overall picture, while using more than 1 momentum indicator gives better and more reliable entry and points for exit trading.

Best combination of indicators & their signals help to analyze a lot of the trading market activity.

Example 2:

Whipsaws and Stochastic System - Best Combination of Indicators PDF Indices Trade

Buy Trade Signal - Best Combination of Indicators in Indices Trade

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

Well, the answer is that by checking on the other indicators such as MACD a stock index trader could have avoided the whip saw, even the MACD indicator had not given a indices cross over signal although it was very close to the zero centerline level, at the same time slope at which the moving averages turned wasn't so sharp as to trading signal a decisive trend reversal. The thing is that it’s not so obvious when it comes to recognizing fake outs: it's a skill which takes some time to learn but after some time you as a trader can identify whipsaw fake-outs after some practice.

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

Duringranging sideways market trends Stochastic Indicator will give the fastest signals which are prone to whipsaw signals. This is why stochastic oscillator is best combined with other indicators and signals transacted are confirmed by other one or two other trading indicators to develop - Best Combination of Indicators - Top 10 MetaTrader 4 Indicators - Best Combination of Indicators for Trading.

Study More Lessons and Tutorials & Topics:

Trade Stock Indices

Stochastic Oscillator Indicator, MAs, RSI & MACD.