The market has high inertial oscillations. This allows traders to successfully make profits under conditions of delayed signals from technical analysis systems. The degree of inertia depends directly on the strength of the initial impulse. We will now look at a simple 5-minute strategy that uses an impulse indicator as an additional MACD signal filter.
The Parabolic system is a popular trend indicator that shows reversal points. Its only drawback is its duality: it is not able to recognize neutral phases of the trend, so it immediately signals downward or upward price movement. In order to compensate for this deficiency of the Parabolic SAR, traders use auxiliary indicators that act as a signal filter. In this article, we will look at a trading strategy that uses the Parabolic in combination with the Time Series Moving Average (TSMA).
The MACD is a trend indicator and the RSI is an oscillator. We can say that these two indicators are the brightest examples of their types. This combination of trend instrument and oscillator is a successful one: when used together, there is a significant increase in the accuracy of the signals. In this article, we will look at the difference between oscillators and trend indicators, as well as review a trading strategy using the MACD and RSI.