Stochastic Oscillator Technical Indicator, Moving Averages, RSI and MACD.

Best combination of technical indicators PDF - Stochastic Oscillator Technical, Moving Averages, RSI & MACD

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

RSI
MACD
MAs Trading Indicator

Example 1:

Stochastic System - Best Combination of Indicators PDF Stock Index Trading

Best Combination of Indicators

From our indices trading system the sell signal is generated when:

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

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

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

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

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

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

Best combination of technical 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 Trading

Buy Trade Signal - Best Combination of Indicators in Indices Trading

For this example the trend is clearly upward, but at some point there were a few fake outs generated by the stochastic oscillator trading 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 gradient at which the moving averages turned was not 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 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 is above zero center line even if the MACD lines are heading downwards then the trend is still upward. As you can see from the above example MACD indicator never went below the zero line and afterwards the upwards trend continued with the MACD stock technical indicator maintaining above Zero line & continuing to move upward.

Duringranging sideways market trends Stochastic Indicator will give the fastest trading 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 trading indicators to develop - Best Combination of Indicators - Top 10 MetaTrader 4 Indicators - Best Combination of Technical Indicators for Trading.

Study More Lessons and Topics:

Trade Stock Indices

Stochastic Oscillator Technical Indicator, Moving Averages, RSI and MACD.