How to connect the SMA, the RSI and the MACD for a successful trading strategy

Combo Trading Strategy

The indicators are designed to help in finding the best entry points. However, nothing is perfect and it is quite common that they give a signal with a slight delay. Thus, it is not a bad idea to get confirmation of the signals received by using another indicator.

Today’s strategy I would like to describe connects three indicators. They are the Simple Moving Average, the Relative Strength Index, and the Moving Average of Convergence and Divergence.

Key Takeaways🔑

Combining indicators like the SMA, RSI, and MACD can provide stronger trading signals.
Patience is key in waiting for all conditions to be met before entering a trade.
Practicing on a demo account can help familiarize you with the strategy and minimize risk.


A strategy combining the SMA, the RSI, and the MACD

How does it work?

The main indicator is the RSI. A trader will follow its line and check when it crosses the 50 levels. The SMA is showing whether the price is over or under the average rate for a certain number of periods. Just check whether the price bars form under or over the SMA line. The second filter used in our strategy is the MACD indicator. It provides quite powerful signals at the time of crossing the baseline.

How to set up the indicators

You have to be logged in to your Olymp Trade account. Choose the asset, set the chart, and then click on the indicators feature icon. You have to add each indicator separately. To the needs of our strategy leave the default settings for all three indicators.

Strategi is using SMA, RSI and MACD, all with default settings
The strategy is using the SMA, the RSI, and the MACD, all with the default settings

Signals for opening UP trades at Olymp Trade

Several conditions have to be met to open a buy trade.

  • The line of value 50 in the RSI window has to be crossed from below.
  • The price bars have to develop above the SMA10 line.
  • The two lines of the MACD indicator have to intersect under the 0 line.

When all the above demands are fulfilled you can enter a UP trade for the duration of the next candlestick.

Signal to open Call option
Signal to open Call order

Signals for opening DOWN positions on the Olymp Trade platform

The following rules apply for opening a short trade:

  • The RSI 50 line is crossed from above.
  • The price bars develop under the SMA10 line.
  • The MACD lines intersect each other over the 0 lines.

Only then you can successfully open a sell position.

Signal to open Put option
Signal to open Put order

Pros and Cons of Using a Strategy Combining the SMA, RSI, and MACD📊


  • Stronger Signals: Combining three indicators provides more reliable signals than using each one individually.
  • Greater Accuracy: This strategy aims to improve accuracy in predicting market trends and movements.
  • Suitable for Various Assets: The strategy can be applied to different types of assets available on the trading platform.


  • Requires Patience: Waiting for all three indicators to align can take time, which may not suit all trading styles.
  • Potential for False Signals: Like any trading strategy, there is a risk of false signals leading to unsuccessful trades.
  • Needs Understanding of Multiple Indicators: Traders need to understand how each of the three indicators works individually before they can use them effectively together.

Key Elements of the SMA, RSI, and MACD Strategy 📉📈

Indicator Role in the Strategy
Simple Moving Average (SMA) Used to identify whether the price is above or below the average rate for a certain number of periods.
Relative Strength Index (RSI) Signals entry points when it crosses the 50 level line.
Moving Average Convergence Divergence (MACD) Provides signal confirmation at the time of crossing the baseline.

Final thoughts

The signals received from three indicators together are pretty powerful. However, they do not occur often. The crossings on the RSI and the MACD may happen on slightly different candles. The RSI may oscillate close to 50 for a relatively long time. Such signals are not valid. Remember, that for a strategy to work, all three conditions must be met. Waiting for a strong signal requires a lot of patience. But once you have finally got the green light to go, you may be pretty sure it will be a winning trade.

I encourage you to try the strategy on the free Olymp Trade demo account. Trading there is risk-free, so you get time to learn the strategy well. If you have any questions or doubts, do not hesitate to share them in the comments section down below.

Wish you success!

Quick Q&A Section🔍

  • Q: Can this strategy be used for any type of asset?
    A: Yes, this strategy can be applied to a wide range of assets available on the trading platform.
  • Q: What are the key conditions for opening an UP trade?
    A: The RSI line has to cross the 50 level from below, the price bars need to be above the SMA10 line, and the MACD lines have to intersect under the 0 line.
  • Q: What happens if the signals from the three indicators do not occur at the same time?
    A: For this strategy to work effectively, all three conditions must be met simultaneously. If the signals do not align, it’s recommended to avoid entering the trade.
  • Q: Is it necessary to understand each indicator individually?
    A: Yes, having a good understanding of each indicator (SMA, RSI, and MACD) individually can greatly enhance the effectiveness of this combined strategy.
  • Q: What should I do if I’m new to this strategy?
    A: If you’re new to this strategy, it’s advisable to practice on a demo account first. This can help familiarize you with the indicators and strategy before trading with real money.

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Bart Bregman

Full time day trading, and helping out with Olymp Trade wiki in my spare time to create an awesome platform for beginners. I'm a digital nomad that travels the world while working from everywhere!

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