Hey hey, what's my friend, so in today's training you will learn how to combine trading indicators like a pro, so you can better time your entries and exits right and get better trading results. But first right have a look at this chart over here and tell me right what's wrong with this well, for some of you look at it may be thinking, hey Reena, there's nothing wrong with this man. This looks good right. Look at the signal of this.

This chart right, the market is going up higher. Look, this RSI is pointing higher. The CCI is pointing higher. The stochastic is pointing higher.

All this market is, bullish is going up for sure. The problem with this chart is that this group of indicators they are correlated. They are notice, oscillators right away. They are calculated the way, the logic of behind these indicators, the math behind it, is largely similar, and that's why this indicators they all move in the similar manner, they're correlated it's not because the signal is strong.

It's not because the market is about to go up higher. It's not because this is a high probability trade, but rather this group of indicators. They behave in a similar manner when one goes up. The other goes up as well when it goes down.

This one goes down this one goes down, this one goes up. Tongue goes up. This one goes up: it's not because the signal is strong, it's because the logic behind it, the math behind it right of this indicators, are largely similar, and this is a mistake right and many traders make when they use indicators you just splash it all. There Chan try, looks good all pointing in the same direction.

Oh this is high probability. Trade, let's buy, buy, buy market, reverse, they get stopped out and they wonder why you know all these indicators. They are all saying the same thing, but you know I still lose money and that's why, right you can't just splash any Tom Dick Harry indicator on your chart. Right, it doesn't add value to your trading.

You only clutters your trading. The more indicators on your chart doesn't mean that you're gon na get middle. A better interpretation of the chair, not gon na get you no better analysis, doesn't work that way right. It's like you know, trying to get your wife pregnant right.

You can't fire one time ten times a hundred times it takes my month for baby to come up. It doesn't mean that you know you fire five hundred times all right. The baby will come up in one month. Doesn't work that way.

The more times you fire doesn't mean it's better, and it's the same as this right, the more indicators that you add your chart. It doesn't mean it's better. You have to know what you're doing okay. So another question is: how do I combine training indicators such that he adds value to my training, such that you know it makes sense.

That's the question! Okay! So that's what we're going to cover right now: okay, how to combine trading indicators and by the way, right if you're, enjoying this video so far, give me a thumbs up if you don't enjoy, then hit the subscribe button alright. So the question is how to combine trading indicators right. The way to do it is that the way I do it is that I like to categorize them by their purposes. Some people like to you know categorize indicators by the category.

Like you know, oscillators volume, trending indicators, etc. For me, I like to categorize them by their purpose right, and the way to do it right is that you have to know right the math behind all these different indicators and logic behind it and to make a life easier right. I have broken down most indicators right into one of these four purposes: right most indicators right. You will land up in this one of these four purposes, so the first one is market condition, area of value, entry trigger and trait management.

Let's talk more about it. So for market condition right, what you want to do is that identify right. The trend identify whether the market is enriched, identify where the volatility is high. Although there are many indicators for this right, but to simply find this, I'm only using moving average and every edge, because I just want to illustrate the concept to you so for moving average.

Okay, you can see over here this black line over here is the 200 period moving average this one here. So what this does right? Basically, this indicators, it measure historical prices right. It sums up the historical prices over time. So, for example, if prices have been falling right, he woke up late.

The average right over the last 200 period, for example, 200 P, removing everything Coakley's the average over the last 200 period, and then he plots up as a line on your chart. So if the prices have been falling over the last 200 period, the moving average will be pointing in horror. Okay. So you can use this as a indicator to tell you whether the market is trending, higher or lower one way to go about it is that if the price is below the 200 period moving average, you can say that the overall market is in a downtrend, and You want to look for selling opportunities like this one right over here.

Right generally, the price is below the 200 period moving average. Then you want to look for selling opportunities and opposite is true. If the price is consistently above the 200 P, removing average, you want to look for by opportunity. On the other hand, right every stretch, let's talk a little bit about this.

You can actually get out. The average range like this one here you can see over here. Okay, the color here is quite bad, so I'm just gon na adjust this color to help you see better. Okay, you can see.

This is a pink line at the bottom. Okay, you can see that now this indicator, the ATR on, is not correlated with stochastic and RSI, and the reason, because is because they are of different purposes every stretch. It measures volatility in the market, whereas the other two is just an oscillator that oscillates between zero and hundred. So you can see that over here, the line over here is hitting the wall over time.

What is it telling you? It's telling it over time right from here here: okay volatility in this market over here is decreasing. It's nothing to do with the trend. It only measures - volatility in this market. Likewise, over here I can see volatility you know getting a lower over here can see that the range of this candle of this bar, so it getting smaller as well over here.

On the other hand, right you can see over here this portion here volatility is high. What does this tell this tells you that the range of the candles on the channel is large. It's white, which actually is this part over here range of these candles, are large, it's white, so you can see that this is what ATR does it helps you identify the market volatility volatility, whether it's high, whether it's low and then maybe can use it to. You know use the appropriate trading strategy for this different market conditions.

Next, one right area of value right for this one you're pretty much asking right where my potential buying or selling pressure comes in, you can use a tool like moving average or stochastic right. Let me explain so, for example, this one over here: let's change this to the 50 ma, because you can see it's a healthy trend, don't destroy how the price respects the 50 period moving average. She finds area of value. This lows this lows: this loss and this loss, so this 50 period, moving average, is acting as an area of valley where potential buying pressure could come.

It makes sense, and likewise you can use a tool like stochastic as well, whenever the price is below 20 right. This could be an area of values, well here here here here it here, okay, so these are two different indicators to help you identify area of value on the chat in essence right la area of value. It's telling you right: where should you be by rushing you be by at the loss, or I wish part of the loads right so area of value can help you identify, know what it's low in the market, whereas the trending market that the tools to identify the Market condition it tells you what to do she'll be buying, or should you be selling area value tells you where to buy where to sell moving on entry triggers. So once you have your trading setup requirements, let's say it's it's there.

What is the trigger to get you into a tree right for many traders is to be as simple as candlestick patterns may be forms a hammer forms a shooting star whatever, but you can also use indicators right to get you into a trade as a entry trigger For example, two common ones are relative strength index the RSI or D, don't change channel. So let's have a look alright. So, for example, RSI you can look to buying right when the RSI crosses above 30. So, in this case, here RSI, I think, is about 30 right ready crosses above 30 right.

It can be a buy signal on the RSI indicator. That's one way to surface and Henry trigger. If you think about this right, what the RSI does is that it measures momentum in the market. So when our site crosses above 30, it is telling you that there is bullish momentum coming to the market and you can look to buy when it crosses above 30.

So this is an objective way to you know, enter a trade as an entry trigger same for stochastic right. You can either use it as an entry trigger with stochastic crosses above Tweedy, that's possible as well, and another one I want to share is the dungeon channel. Don't change channel what it does is that it measures the previous day, sorry, the 20 week high and Tweety week, low tester by default. So one way it is, is that if you want to trade breakouts right, you can use the dungeon channel to appear.

We do get a bar right whenever the price hits. The upper blue line is telling you that it meets a 20-day high. There could be an entry trigger to enter a trade right, so this is don't cheat channel and finally, right. The last group of indicators right.

The used to help you manage your treat, you know, can help you use to setting stop-loss set your target profit right, trailer, stop-loss, etc, can use the chandelier, stop pivot points every to reach, etc. So again, just to illustrate let's say we are going with a pivot point right. So this is something that it's a pretty you use pretty commonly I'm just gon na fire out the pivot point pivot points standard, so you're gon na see a bunch of light on your chart. Okay, you can actually ignore all the earlier lines, because it's kind of irrelevant really the way pivot point works is that it takes the high-low, a close zig price of the previous day and plots out right support and resistance for today.

In fact, I can just it'll remove all the earlier line since it's not relevant there, you go okay, so all it's gone right. So what this tells you is that, based on the previous day, prices right - this are the current pivots for today right, so you might find resistance at this level resistance here and resistance here. You might find support at this level here here and here, okay, so this is how pivot point works, and you can use this right as target profit right to to use it to exit your tricks right, where you might not have an eye - and I do know Where should I exit my trade pivot points can be used to help you to define your target profit and also another one. Is the chandelier crow stop? Okay? So let me just show you what this one means.

So this one is generally a cruel stop. So what happens is that you see this blue line in this pink line over here and I'm just going to change this to a twenty period. Here, multiple is three okay, so what happens? Is there, for example, earlier with only every sure it measures volatility the markets? So when you drill your stop-loss right, you'd want to set your stop loss too tight because it could be just due to a spike in the the normal market volatility and it gets topped out. So one way to go about is use the volatility of the market right to trailer stop-loss.

So what you can do is that you can use the chandelier stop right. Does it that it adds a multiple to this ATR value, for example the multiple you saw earlier. I use three ATR okay, so you can see it over here from this lows right: let's call it X. Okay, you add on three ATR, and this value, let's say, is call it Y, and this Y is that this pink line over here right this from this highs to this loss is 380 R.

So what this means right? What chandelier stop does is that it gives you a level two trill, your stop loss right, so you can write trends in a market and you can imagine it as the price hits lower. This pig line will go down nowhere as well alright, so this is very useful to actually know write trends in the market. Ok, so that's how this indicator work so now, what is the best indicator combinations? How do you actually combine indicators right? So the general guideline is this number one you have to know the purpose. What are you trying to achieve if your indicators are you trying to define the trend? Are you trying to use it as an entry trigger? Are you using it to identify the area of value? What is the purpose? You must know the purpose second thing right only pick one indicator from each category early.

You saw the mistake that many traders make right. Three indicators from the same category doesn't make sense right. So only pick one indicator from each category and try not to have more than three indicators on each other, because really you don't need more than three right for me personally, I used to just one sometimes two, sometimes nothing at all. It really depends if you are a price action trader I'll say one or two indicators is more than enough to supplement right, your price action trading and analysis.

Okay, so with that said, let me share with you some examples. Okay, so let's say you are looking to capture a swing in a trending market. You can use these three indicators moving average RSI pivot points. Let me show you and I'll explain why so with nobody RSI.

Okay, I like to use a temp here RSI, because it's more responsive and takes into account its of data - I like to use 20 period and we don't need a chandelier case. Stop right. Let's remove this, we have the moving average. Okay, are those the three indicators moving average RSI pivot point? Okay, we have moving average, we have the RSI and the pivot point, so I just remove the ATR for now.

So let me explain you what I'm doing with this. You can see the over alright this SMP 500. We are using this moving average to identify the trend for us. So since the price is above 200 ma, we can conclude that it's the uptrend so we're looking for buy opportunities.

Next thing we are using, the RSI are SN entry trigger to enter trade, so maybe the entry trigger could be row RSI below 30. Okay, we look to buy so right now. Rsi is still not below 30. Yet right.

So if it goes below 30 and let's say spice up higher right, we will buy okay. So that's a helping us define the area of value and entry trigger. The area of value is RSI below 30. The entry trigger is RSI crossing back above 30 and for exist drive.

We can use the pivot point to help us define know where the market might find potential. You know selling pressure to us. You know define levels to take profit, so it could be the r1 r2 or r3. So does it make sense? Can you see how all these different indicators have their own purpose? Another example ATR and dodge channel.

So, let's say you're looking for a low volatility, break up trade right, so what you can do is again. Let's say we look at brain crude oil. Okay, I just remove all those indicators remove this okay, so low volatility breakout. So what you want to do over here is a kid.

It's your indicator. It helps you identify volatility in the market, so you can see that right now, volatility is pretty damn low. It's near multi-year lows: okay and the dodging channel can serve as a trigger to enter trade. So when you see over here at the price breaks below this blue line rather hits the low of the blue line.

It's telling you that he has made a 20-week low. So this could be a low volatility breakout frame. The price has made a 20-week low in a low-volatility environment, and really, if you want to you, know any more indicators to trailer stop-loss you can. You can use like, for example, the chandelier cruel stock, two trillion stop-loss or if you want, you can actually use a moving average to trail.

Your stop-loss, for example. Let's say I pull our I mean tone appeared is quite high. Let's say we use a 50 period. Moving average, and so once you are, got a bought, the trade right where you go shut down the break of this lows in the low volatility volatility environment.

How do you bearish your trade right? You can use a 50 period moving average and exit only way. The price closes below it, which is somewhere about here where the price closes above the 50 ma. So you can see how the moving average, how the dungeon Channel, how the ATR indicator you can combine them right and to formulate the right trading setups, and I hope this makes sense. This is important.

Okay, so let's do a quick recap right, the more what different indicators they have different process. You must know what is the purpose number 2. You must know what you need right. Are you trying to identify market condition? Are you trying to manage your trade? Are you trying to identify in real value, etc, not more than one indicator from each category, because anything more is just it's just noise, it's adding clutter to your chat, doesn't make sense and don't have more than three indicators on your chart.

Okay, if you're a price action trader in your using indicators, I would say one more or two more it's more than enough all right so with that's it. I have come towards the end of today's training or I hope you got value out of it. If you want me to cover any specific topics, right leave it in a comment section below if you've enjoyed this video hit, that thumbs up button subscribe to my youtube channel, and I will talk to you soon. You.