Stochastic Gold Trading System - Combining Stochastics with Different Types of Technical Gold Trading Indicators
This topic should be called: Combining Stochastics with other Indicators, but Stochastic Gold Trading System sounds real nice.
Stochastic Oscillator gold trading indicator can be combined with other gold trading indicators to form a gold trading system. For our example we will combine it with:
- Moving Averages
Example 1: Gold Stochastic Trading System
Sell Gold Trading Signal Generated using Gold Stochastic Trading System
From our gold trading system the sell gold trading signal is generated when:
- Both Moving Averages are moving down
- RSI is below 50
- Stochastic heading downwards
- MACD moving downwards below center-line
The sell gold trading signal was generated when all these gold trading rules were met. The exit gold trading signal is generated when a signal in the opposite direction is generated i.e. When the gold trading technical indicators reverse.
The good thing about using such a gold trading system is that we are using different types of gold trading indicators to confirm the gold trading trade signals and avoid as many gold trading whipsaws as possible in the process.
- Stochastic - is a momentum oscillator gold trading indicator
- RSI- is a momentum oscillator gold trading indicator
- Moving Averages- is a gold trading trend following gold trading indicator
- MACD- is a gold trading trend following gold trading indicator
It is very useful to combine more than one gold trading indicator, as a combination of gold trading signals is better than relying on just a single gold trading technical indicator. The gold trading indicator combinations reinforce each other, and cancel out false whipsaw gold trading signals.
A gold trading trend following indicator helps a gold trader to see the overall picture, while using more than one momentum gold trading indicator gives better and more reliable entry & exit points for trading gold.
The gold trading indicators combinations and their gold trading signals help to decipher a lot of the gold trading market activity.
Example 2: Gold Stochastic Trading System
Buy Gold Trading Signal Generated using Gold Stochastic Trading System
For this example the gold trading trend is clearly upwards, but at some point there were a few gold trading whipsaws generated by the stochastic oscillator gold trading indicator, can you spot them? So the question is how can a gold trader avoid trading these gold trading whipsaws?
Well, the answer is that by looking at the other technical gold trading indicators such as MACD gold trading indicator a gold trader could have avoided the whipsaw, even the MACD indicator had not given a crossover gold 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 warrant a decisive gold trading market gold trading trend reversal. Well the thing is that it’s not so obvious when it comes to recognizing gold trading 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 gold trading indicator is above zero center-line even if the MACD lines are heading downwards then the gold trading trend is still upwards. As you can see from the above example MACD gold trading indicator never went below zero line and afterwards the upward gold trading trend continued with the MACD gold trading indicator maintaining above Zero line and continuing to move upwards.
During ranging gold trading markets Stochastic Oscillator gold trading indicator will give the fastest gold trading signals which are prone to whipsaws. This is why stochastic oscillator indicator is best combined with other gold trading indicators and the gold trading signals traded are confirmed by another one or two other Gold indicators.