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Traders only use Most Accourate intraday trading indicators for Intraday Trading Setup. Whether a trader is a beginner or an experienced, indicators are important. It helps you plan your trading for the maximum returns. Referring the intraday trading tips, charts, and indicators is a common way.

Day trading indicators minimize the risk level. The indicators provide useful information on the market trends. This post guides you to understand the indicators. As a thoughtful investor, you also need to decide how much you want to rely on the indicators.

Intraday Trading Indicators – How to Use ?

Day trading indicators provide good guidance. The most useful information from indicators is here. Traders use it for assessment of the market scenario before trading.

  • Direction of the current market trend
  • Momentum in the investment market
  • Chances of profit
  • Volume assessment to know the popularity of the market
  • Demand and supply trading theory

The crux lies in finding a right mix of the indicators for profitable decision. Too much of information might spoil the strategy. Use always best combination of indicators for day trading .

Top Intraday Trading Indicators for Setup

Not all traders prefer to use the Intraday trading indicators. If you use, pick the most suitable and useful. The below list contains some common ones.


Oscillators type of indicators reflects up and down flow. Popular oscillators are Stochastics, CCI or Commodity Channel Index. Others are MACD and RSI.


Volume indicators are a mix of price data with volume. They determine how strong the trends in the terms of prices.


Overlays indicators are Moving Averages and Bollinger Bands. Parabolic SAR and Fibonacci Extensions are other Overlays. Moving Average determines trends. Fibonacci isto plan profit targets. CCI have a good number of uses like trends and trade triggers.

Breath Indicators

The Breath Indicators are stock market related. The major ones are Ticks, Tiki, Trin and also the Advance-Decline line. They relate to the sentiment of the traders. They reflect what the large part of the market is doing.

Bollinger Bands

This comprises three lines. The lines show moving average, lower limit, and the upper limit.

How to Read Intraday Trading Indicators

Using many intraday trading indicators is not a good idea. Pick the one among the most useful ones. Also, use the one that you can read well. Find here an easy way to understand the most popular tools available.

1. Moving Averages (M.A.) :

The market trend is bullish when the long-term averages are less. It is bearish when short-term averages are less. This helps traders to earn indecent profit in intraday. Its very Simple Intraday Trading System. USE THE 5/10 EXPONENTIAL MOVING AVERAGE FOR ENTRY POINT AND 50/200 SIMPLE MA FOR GUESSING THE LONG TERM TRADE.

Uses of Moving Average

  • To find the trend, either up or down
  • To know the reversal of trend
  • To find out the stop loss and trailing stop loss
  • To find out the price over extended

Basic Buy signals for MA

  • Moving average should almost be parallel and at equal distance
  • They should be in ascending order
  • Lowest Ma is at the bottom while highest Ma is at the top
  • The first signal get generated when the price cuts the short ma from the bottom

Basic Sell signals for MA

  • Moving average should almost be parallel and at equal distance
  • The moving average should be in the descending order
  • The first signal get generated when price cuts the higher Ma from the top

    2. Moving Average Convergence Divergence (MACD) :

    MACD is used to identify the different aspects of overall trend. These aspects are momentum, trend direction and duration. MACD takes the difference between two lines as histogram and oscillates above and below center zero line.


    Trading with MAC Bands

    One of the popular methods of trading among the technical traders is ‘trading with bands’. By plotting the high and low of a particular Moving Average, ‘bands’ are created. This is done with the help of standard deviations of MA. The simple trading rule of MAC is as follows: buy when price closes above MAC and short sell when price closes below MAC.

    Trading with Bollinger Bands

    This band is a powerful tool that measures volatility.It has a moving average plotted as the middle band. Above and below of this MA, two standard deviations of this MA are further plotted. When the volatility increases, the bands automatically widen and when the volatility decreases these bands narrow.

    John Bollinger, creator of this band, has described the calculation for Bollinger Band as follows:

    • Middle Band = 20-day simple moving average (SMA)
    • Upper Band = 20-day SMA + (20-day standard deviation of price x 2)
    • Lower Band = 20-day SMA – (20-day standard deviation of price x 2)

    Keep in mind that volatility must increase after a low volatility period; and likewise after a high volatility period it must decrease.

    Seven Simple Guidelines for Learning Bands

    1. Information with regard to volatility, trend, relative definition of high and low are provided by Bollinger bands.
    2. These bands use number of momentum indicators or oscillators like CCI, RSI and more.
    3. Using this band, traders can easily identify ‘W’ bottoms and ‘M’ tops.
    4. Since prices, closing outside the band, are not a reversal signal,it is acontinuation signal.
    5. The default parameters can be modified according to the given market situations.They are 20 periods SMA and 2 standard deviations.
    6. Bollinger bands of Multi time frame can be used.
    7. To get better results, %B indicators and bandwidth usage can be done.Trading-With-Bands-2

      Trading with Keltner Channels

      Chester Keltner wrote a book called ‘How to Make Money in Commodities’ in 1960. In that original version, he has introduced “Ten-Day Moving Average Trading Rule”.This rule begins with the centerline that has 10-day SMA with its typical price {(H+L+C/3)}. To set the upper and lower channel lines the 10-day SMA that includes High-Low range has to be added and subtracted.

      The modified version of this rule is introduced by Linda Bradford Raschke in 1980, which uses Average True range. To set channel width, ATR technique introduced by LBR is used. The channels have two ATR values which are placed above and below the exponential moving average or EMA that indicates channel width. This is a trend following indicator. It enables reversals along with channel breakouts. In addition, oversold and overbought levels can be identified.

      Calculation to be done to create this channel

      • Middle Band: 20 periods EMA (exponential moving average)
      • Upper Band: 20 periods EMA + (2 x ATR (10))
      • Lower Band: 20 periods EMA – (2 x ATR (10))

      When we study deeply, we come across two major differences between these Bollinger and Keltner Channels. They are:

      • Standard Deviation used by Bollinger band is less volatile than ATR used by Keltner Channel and hence Keltner is smoother than Bollinger band.
      • EMA used by Keltner Channel is more sensitive towards price actions than SMA.

        4. Relative Strength Index (RSI) :

        when RSI touches 70, selling the stock is good. Vice versa, buying is good when it RSI goes down to 30. Yet, a stock-specific study is important.

        • This indicator is known as Momentum Indicator.
        • RSI indicates that the price is Oversold or Overbought.
        • RSI compares the price Between Advancing period and Decline period.
        • The Common parameter is 14 period.RSI-Intraday-Trading-IndictorsTrading-With-Bands-2

           Average Directional Index (ADX) :

          ADX is used to quantify the strength of the trend. ADX calculations are based on a moving average of price range expansion over a given period of time. The default setting is 14 bars, although other time periods can be used.

          • This Indicator is Momentum Indicator.
          • Reading between 0 to 100
          • Below 10 to 15 indicates the consolidation.
          • > 25 reading indicates the strength
          • Calculated from +di and –diADX-Intraday-Trading-Indictors-696x348intraday trading indicators are not a proven way to earn profits. They are good to read the market moods for the best investment decisions.

            Intraday Trading Indicators

            Be it a beginner or an established trader, following the basic intraday tips is a common practice before starting the trading day. However, your trading strategy changes with time, and the concurrent events play a huge role in its working. In order to maximize returns, it is essential to understand the market. For this purpose, there are trading indicators. Trading indicators are beneficial tools that are used with a comprehensive strategy to maximize returns..

            Information Offered by Intraday Trading Indicators

            • The direction of the trend to determine the movement
            • The lack of or existing momentum within the investment market
            • Profit potential due to the volatility
            • Determine the popularity through volume measurements.

            These are the vital pointers shared by trading indicators. These basic, but beneficial pointers help in assessing the market conditions and allow traders to take better decisions with respect to trade positions.

            Useful Intraday Trading Indicators

            • Moving Averages: Traders often hear about daily moving averages (DMA), which is the most common and widely used indicator. The moving average is a line on the stock chart that connects the average closing rates over a specific period. The longer the period, the more reliable the moving average. This indicator will help you comprehend the underlying movement of the price, as prices do not move only in one direction. Stock prices are volatile and the moving average indicator smoothens the volatility to provide an understanding of the underlying trend of the price movement.
            • Bollinger Bands: This intraday trading indicator is one step ahead of the moving average. This band comprises three lines—the moving average, an upper limit and a lower one. All these are representative of the stock’s standard deviation, which is nothing but the amount by which the price increases or decreases from its average. This provides traders an understanding about the stock’s trading range.
            • Momentum Oscillators: Stock prices move up and down. There are short-period cycles that are unrelated to the bullish or bearish market trends. In such cases, it is easy for day traders to miss out on such changes, which is when the momentum oscillator is beneficial. This indicator is depicted within a range of 0 to 100, and is advantageous when the price has achieved a new high or low, and one wants to determine whether it will further rise or fall. In other words, the momentum oscillator helps to understand when the market sentiments are undergoing modifications.
            • Relative Strength Index (RSI): The RSI is one of the useful intraday trading tips to compare the share price’s gains and losses. This information is then formulated in an index form, which further helps in narrowing down the RSI score ranging between 0 and 100. This index increases with price rises and vice versa. Once the RSI increases or decreases to a specified limit, you can modify your trading strategy.

            Decoding the Intraday Trading Indicators

            • Moving Averages: If short-term averages are exceeding the long-term averages, it indicates a bullish market trend. Traders may take a buy call with specific strategies like stop loss either at the long-term moving average or retracement support, and vice versa. This intraday tip can help traders earn decent profits through intraday trading.
            • Bollinger Bands: If the stock is trading at a price below the Bollinger Band lower line, there is potential for the price to increase in the future. Traders can choose to take a buy position. On the other hand, if the current stock price is over the upper line, traders can sell the share.
            • Momentum Oscillators: If the share price has reached a historical high, and the level of the oscillator is not the same as the price, it is indicative of slowly decreasing demand. This also indicates the possibility of a stock price fall. And the opposite is true for stock price rise.
            • RSI: Most analysts will recommend traders to sell the stock when the RSI touches 70 and a buy recommendation when it falls to 30. However, all stocks may not adhere to this pattern, so it is important to analyse the volatility and RSI history before making a decision.

            Using intraday trading indicators help in averting risk and placing appropriate trades based on technical analysis and market sentiments. Angel Broking Angel Eye offers detailed charts and stock analysis reports that comprise these trading indicators. These tools help in planning an effective trading strategy, while minimizing risks.


This post first appeared on STOCKTRADING ADVISOR, please read the originial post: here

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