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How to blend indicators as a simple way of doing effective forex

Donalyn June 20, 2015 0
How to blend indicators as a simple way of doing effective forex

Blending indicators can help you to find another perspective on price movement. The integration can also make “the complementary indicator”. This blending is commonly referred to as “trading system”. For example, the moving average is basically equipped with a stochastic trend indicator which is an oscillator to determine buy or sell action. In this article, you will see examples of the use of indicators are used in conjunction with other indicators. We will not discuss too much, as we will discuss only the simple and popular system, namely a basis for building a trading system. Typically, traders combine the two to three different indicators in their trading systems. The decision to buy or sell is taken when the three indicators have “confirmed” the same signal.
OK! Let’s discuss three important points as follows:

1. Utilization pattern
This is a very simple system. You just need to recognize patterns that appear to predict further price movement. Of course, to be able to recognize the emergence of a pattern, you should increase your workout so that you would get accurate observations.

2. Fibonacci retracement + candlestick / price pattern
This technique can be quite simple. All you need is a little support trend line and Fibonacci retracement and a little help also from the candlestick and / or price pattern.
This system is based on the trend. Therefore, of course, a good understanding of the trend itself is absolutely necessary. The system also uses trading strategies that utilize bounce reference Fibonacci retracement level.

The first thing to do is to determine the trend. The next step, pull Fibonaci retracement is based on the last swing that you see on the chart. Then, note the Fibonacci retracement of the reference area, those are 38.2%, 50% and 61.8%.
Next, locate the bounce (reflection) of the Fibonacci reference area. Confirm that you can use is a candlestick pattern or pattern. So, you have to wait for a pullback to Fibonacci reference area and then find out if there is confirmation pattern bullish / bearish.

3. Fibonacci retracement + stochastic oscillator + CCI
In this point we still use Fibonacci retracement, but this time we will combine it with stochastic and CCI. Its use is also quite easy. We should wait until the pullback occurs to the Fibonacci reference area, and then wait for a signal to buy / sell from stochastic and CCI. The signal must come from the two indicators to obtain confirmation of a strong signal.

OK. Trading system described above is just a one example you can use. You can do experiment to combine multiple indicators to be a trading system that fits your trading style.

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