Introduction: In trading, MACD is a very popular technical indicator that can help us identify trends and judge buy and sell signals. However, not all indicators are suitable for use with MACD. Today, we will explore those indicators that are not suitable for pairing with MACD.
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1. MACD and Moving Averages Overlap Too Much
MACD itself is an indicator evolved from moving averages, so when combined with ordinary simple or exponential moving averages, it may lead to information duplication, losing the advantages of the indicator combination.
2. Stochastic Oscillator
The Stochastic Oscillator and MACD are both used to measure market momentum. Their combination may lead to the repeated appearance of similar signals without providing effective confirmation.
3. RSI (Relative Strength Index)
RSI is also a momentum indicator, and its combination with MACD may lead to overly complex interpretations. Both MACD and RSI are good at detecting momentum changes in the market, so they can easily produce confusing signals.
4. Bollinger Bands
Bollinger Bands are more often used to observe price volatility areas. When combined with MACD, due to the different aspects of information they focus on, it may be difficult to provide clear trading decisions.
Conclusion: Choosing the right combination of indicators is crucial for trading decisions. When selecting indicators to combine with MACD, we should not reuse the same type of momentum indicators, but rather look for new perspective indicators that can complement the shortcomings of MACD to obtain a more complete market analysis view.
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