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Multicolinearity Sensible technical analysis means avoiding multicolinearity or the use of more than one indicator to count the same information. For instance, MACD, RSI and Rate-of-change are all based on closing prices and all are momentum indicators. Using these together would be practicing multicolinearity. To avoid multicolinearity, indicators should complement one another. For example, RSI, Chaikin Money Flow and moving averages might be used together to avoid multicolinearity. RSI for momentum, Chaikin Money Flow for buying and selling pressure and moving averages trend following.

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