There are many ways to use technical indicators. Some traders combine different technical indicators to build trading systems. A simple example with moving average, MACD and RSI will be illustrated below.
In this MT4 chart setting, the blue line is the 10-days Exponential Moving Average while the magenta line is the 20-days Exponential Moving Average. Underneath the price chart we also have a MACD and an RSI.
The rules of the system:
- Blue line rises above magenta line
- MACD crosses zero from below to above
- RSI crosses 50 from below to above
When all three criteria are met, enter long (buy). When the reverse of all three criteria are met, enter short (sell).