Are you looking for the best indicators for intraday trading? In actuality, there are very few indicators that serve the purpose. Most trading indicators can confuse traders and in some cases, make day trading an unpleasant experience. This is why, it is crucial to be cautious on the kind of intraday chart, strategies, techniques and patterns you are following so that they can be used appropriately on the right trading indicators.
As a day trader, it is exceptionally vital to understand these factors as your trading decisions can be based on these indicators.
One of the most essential intraday tips is always to follow the trend. Regardless of whether you are a new intraday trader or a seasoned one, the most critical trick you have to adopt is to forecast the movement of stock prices that you are trading in. Intraday traders look to understand the market and see where it is going or expected to go, in order to make the right trading decision. You can do this by employing technical analysis.
Technical analysis is useful in analyzing price movement statistics and volumes, making it an effective trading mechanism to forecast the future trend of the stocks. With the help of advanced trading software and analytical tools from reputed brokers such as Kotak Securities, you will be able to make predictions based on the intraday-trading-indicator information provided by the software.
Broadly speaking, there are four categories of intraday trading indicators. Some experts recommend following one indicator in each group to make the best decisions. The four types are-
- Oscillators
- Volume
- Overlays
- Breadth Indicators
When used in combination with effective trading strategies and techniques, intraday trading indicators can provide you with the best returns. While some traders employ a wide range of indicators, and some use none at all, it is strongly advised to use only the best and most appropriate indicator to make the right call.
Remember to use trading indicators in alliance with your overall trading strategy. Understanding how the indicator can work to your advantage, the assessment it makes and how these assessments can impact your trading decisions can be of paramount importance.
Here are some best intraday trading indicators that are used either individually or in combination with other indicators. They are-
- Moving Averages
- Moving Average Convergence Divergence [MACD]
- Bollinger Bands
- Relative Strength Index [RSI]
- Advance -Decline Line
- Average Directional Index [ADX]
- Stochastic Oscillator
- Super Trend
- Commodity Channel Index
- On Balance Volume
You can gain vital information from intraday trading indicators. They offer:
- The direction of the trend to help you make the right move
- Offer insight on the absence of or current momentum in the investment market
- The likelihood of earning profits in a volatile market
- Identify popularity through volume measurements
Conclusion
There are various intraday trading indicators widely available to traders. However, at the end of the day, what you derive from each trading indicator or their combination is dependent on your astute judgement. Financial experts recommend that only one or two technical indicators be used at a time during a trade. This is because more than one trading indicator can result in unneeded information that could cloud and complicate your decision-making process.