Now that you’re familiar with some of the most common chart indicators, it’s time to dive into real examples.
Even better, let’s see what happens when we combine a few indicators and observe how their trade signals align.
In an ideal world, you could simply pick one indicator and trade solely based on its signals.
But here’s the catch—we don’t live in a perfect world, and every indicator has its limitations.
That’s why many traders use a combination of indicators to “filter” signals and increase their confidence.
For example, a trader might rely on three different indicators and only take a trade when all three agree.
Bollinger Bands + Stochastic
Take a look at this EUR/USD 4-hour chart, where we’re using Bollinger Bands together with the Stochastic oscillator.
Since the market looks like it’s moving sideways (ranging), the Bollinger Bands can help us spot potential bounces.
Notice how both indicators gave sell signals: EUR/USD hit the upper Bollinger Band, which often acts as resistance, while the Stochastic entered the overbought zone, hinting that the price might soon drop.
What happened next? EUR/USD fell about 300 pips—meaning a nice profit if you went short there!
Later, the price touched the lower Bollinger Band, usually a support level.
At the same time, the Stochastic dipped into the oversold area, suggesting a potential bounce upward.
If you took a long trade there, you could have gained around 400 pips! Not too shabby.
RSI + MACD
Here’s another example using the RSI and MACD together.
When the RSI entered the overbought zone and signaled a sell, the MACD soon confirmed with a downward crossover—another sell signal.
As expected, the price dropped afterward. Win for multiple indicators!
Later, the RSI moved into the oversold zone, signaling a buy.
A few hours later, the MACD followed with an upward crossover, confirming the buy signal.
From there, the price steadily climbed—more pips in the pocket!
You might have noticed that the RSI tends to give signals before the MACD.
That’s because each indicator has its own calculation methods and timing—some give earlier signals, while others lag behind.
You’ll learn more about these differences as you progress in your trading education.
Finding Your Own Indicator Combo
As you grow as a trader, you’ll discover which indicators fit your style best.
We like MACD, Stochastic, and RSI, but your favorites might be different.
Many traders search for the “magic combination” of indicators that always works, but honestly, no such perfect formula exists.
Our advice: study each indicator individually until you understand how it behaves relative to price.
Then, create your own combination—one that makes sense to you and matches your trading approach.
Later on, we’ll share an example of a system that combines multiple indicators to show how they can work together.