Trade Stock Indices

Learn Stock Indices Trading

Stochastic Oscillator, Moving Averages, RSI and MACD Indices Indicators.

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

Stochastic Oscillator stock indices indicator can be combined with other indicators to form a indices trading system - Buy Sell Indices Trading Signal Indicator MetaTrader 4 Stock Indexes Indicators. For our example we will combine it with:

  • RSI

  • MACD

  • Moving Averages

Example 1:

Stochastic Indices Trading System

Best Combination of Indices Indicators

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

  1. Both Moving Averages are moving down

  2. RSI indicator is below 50

  3. Stochastic heading downwards

  4. MACD indicator moving downwards below center-line

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

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

  • Stochastic - is a momentum oscillator

  • RSI- is a momentum oscillator

  • Moving Averages- is a indices trend following indicator

  • MACD- is a indices trend following indices indicator

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

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

Best combination of technical stock indices indicators and their indices trading signals help to analyze a lot of the stock indexes trading market activity.

Example 2:

Whipsaws and Stochastic Indices Trading System

Buy Indices Trading Signal - Best Combination of Indices Indicators in Indices Trading

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

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

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

During ranging sideways stock indices market trends Stochastic Oscillator will give the fastest trading signals which are prone to whipsaws. This is why stochastic oscillator indicator is best combined with other stock indices indicators and signals traded are confirmed by other one or two other Indices indicators to form - Best Combination of Stock Indexes Indicators - Top 10 MetaTrader 4 Stock Indexes Indicators - Best Combination of Indicators for Indices Trading.


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