What is Intraday Trading? Benefits and Alternative Trading Methods

RSI is used to establish overbought and oversold territories for a share by evaluating the magnitude of recent price changes. Average Daily Range provides an upper and lower level around the daily open. It is calculated by taking an EMA/SMA average of a given number of previous days’ True Range.

Typically the 12-day and 26-day moving average of the stock are used. With the growing popularity of intraday trading indicators, it is important to simplify our understanding of them and learn how we can effectively use them to our advantage. Intraday traders use Technical Analysis to identify patterns in price movements on the charts in various timeframes and take positions accordingly. Using intraday trading indicators help in averting risk and placing appropriate trades based on technical analysis and market sentiments. Angel One offers detailed charts and stock analysis reports that comprise these trading indicators. These tools help in planning an effective trading strategy, while minimizing risks.

Hence, a trader must create an insight into the market and follow up on the action. However, for most people, trading becomes challenging as they start getting introduced to unpredictable patterns. But, it happens when a trader isn’t fully aware of the trading environment. In fact a stock may continue to rise even faster once RSI crosses 70. Intraday Trading is a vast topic among itself and hence this list continues.

Lagging Indicators

A bearish divergence occurs when the OBV makes lower highs and lower lows while the price makes higher highs. Volume measures are used to determine the popularity of a product. If there is any momentum in the investing market, it is likely to continue. In case you are looking to start trading online, feel free to share some basic details below. So, Net Advances is positive when advances are more than declines and vice versa.

  • Once the stock reaches the peak of an uptrend and reverses by breaking below the moving average line, you can see the RSI is also reversing from the overbought zones.
  • With his 8 years of experience and expertise, he delivers webinars on stock market concepts.
  • The overbought and oversold level for this indicator can be adjusted as per your need.
  • But with the best intraday indicators, you can hope to achieve some semblance, minimize losses and maximize profits.

A momentum oscillator helps traders to identify such scenarios. It helps to apprehend if the market sentiments are undergoing any modifications. Moving Averages is the Most Commonly use Indicator by Traders in Nse market. Experts Analyst also use this indictor on lot Business News channels while analysing the stock. Stock prices are always volatile and the moving average indicator smoothens this volatility to provide information about the exact trend and movement of the stock.

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As such, using too many indicators can be counter-productive too as they can slow down your decision-making. Plus, many indicators present the same information with a slight variation. While we are all in search of a holy grail to make profitable trades, it is far more rational to be realistic and accept the fact that such trading setups do not exist. The trend indicators are often used to evaluate the direction of the market. If the value is positive, it indicates uptrend, if the CCI is negative, it indicates that the market is in the downtrend.

intraday indicator

You can understand this better by referring to the illustrative image given above. The moving averages can be of different periods such as 5, 10, 20, 50, 100 period MAs. For example, a 10 SMA on a 5 minutes chart indicates a simple moving average of closing values of ten candlesticks of 5 minutes. Due to this unique way of computation, the EMA is more sensitive to the price movements compared to the SMA.

Active traders in the market use technical indicators most extensively, as they are designed primarily for analysing short-term price movements. To a long-term investor, most technical indicators are of little value as they do nothing to shed light on the underlying business. Depending on your trading strategy and the kinds of trades you wish to perform, you can find indicators that help you more than others. For instance, the best indicator for option trading may be an indicator which has no use in a short-term strategy, but one like the Relative Strength Index or Bollinger Bands. Technical indicators are a fundamental part of technical analysis and are typically plotted as a chart pattern to try to predict the market trend. Indicators generally overlay on price chart data to indicate where the price is going, or whether the price is in an “overbought” condition or an “oversold” condition.

Its sole purpose is to measure market volatility and does not indicate the market’s trend, direction, or momentum. Intraday traders also use Moving Averages to calculate the market’s momentum, stop losses, and trend reversals. Specifically, this technical indicator aids in the identification of trading opportunities in the current market’s direction.

trading indicators to know while doing Day Trading

Trading indicators are beneficial tools that are used with a comprehensive strategy to maximize returns. Let’s start our discussion with the Supertrend indicator that can be used as an intraday trading indicator. This indicator is plotted on the price chart and the current trend intraday indicator can simply be determined by its placement vis-a-vis price. It is a very simple indicator that is constructed with just two parameters- period and multiplier. Do you know that technical analysis has many indicators to guide us but all of them are not suited for intraday trading!

intraday indicator

Crossovers are the greatest intraday trading method based on EMA. Take a BUY position when a short period EMA crosses above the long period EMA, and a SELL position when a short period EMA crosses below the long period EMA. Short and long durations should have ideal values of 5 and 20, respectively. It’s common for them to short weaker stocks when their values rise in a bear market. Hence, it is common for day traders who operate independently to work just two to five hours every day.


A pro tip from in-house trading aficionado- use stochastic oscillator along with another indicator such as RSI to further improve the efficiency. Also known as ADX, this stock market indicator is used for assessing the legitimacy of any ongoing market trend. ADX makes use of 3 lines out of which two are the negative directional indicator (-DI) and the positive directional indicator (+DI). MACD is an oscillator, that is, its appearance on the chart can be visualised as two lines oscillating without being curtailed by any boundaries. It is of main use for trading trends and is sparsely used for overbought and oversold conditions. It is a good practice to look at multiple indicators while taking your position in the market.

This indicates to the broker that the user intends to trade the stocks of the same company on the same day before the market closes. The ADX is a trend strength indicator that is non-directional. Its values range from 0 to 100, with the higher the value, the stronger the trend. The default look-back duration for ADX is 14 periods, however, this can vary depending on the stock or index’s relative volatility. It’s frequently combined with two other indicators, the +DI and -DI, to establish the trend’s direction.

It provides a pretty clear view into this stock trend with less volatility. However, it doesn’t predict the direction of the price but very precisely states the current direction followed by past prices. MACD Indicator is used by traders to evaluate the market trend within a time interval. Traders use this to understand the relationship between trends and the momentum of the stock prices. It shows the relationship between two moving averages of Price of security. MACD turns two trend-following indicators, Moving Average into a momentum oscillator by subtracting the longer moving average from the shorter moving average.

Volatility is quantified using standard deviation – which fluctuates when volatility rises or falls. When the price rises, the bands broaden – and when the price falls, the bands will narrow. Bollinger Bands can be used to trade a variety of securities due to their dynamic nature. Intraday trading meaning is https://1investing.in/ simple; it is the process of purchasing and selling stocks on the same day before the market closes. The purpose here is not to invest per se, but to trade for quick gains by controlling the stock indices movement. Hence, the changes in the share prices are tracked closely to earn profits from stock trading.

This technical indicator uses parameters such as period and StdDev. 20 is the preset value for each period and 2 for standard deviations but these can be changed as per your need. We have researched over 100 accurate intraday indicators and shortlisted only the best indicators for bank nifty intraday trading that will surely increase your profits. The best stock analyzers for intraday trading is useful for analysing the volatility of stocks that how frequently their price can vary and by how much. If the volatility is high, then it’s an indication that the price of stocks can drop down or rise up by a big margin.

To calculate when the security’s price closes up, add the day’s volume to a cumulative total, and subtract the day’s volume when the security’s price closes down. In a bull market, the RSI tends to oscillate in the range of 40 to 90, while the RSI Oscillates in the range between 10 to 60. These platforms also provide proper guidance to the investors in how to increase their money and which time is right to invest and which time is not. However, the combination of these indicators can vary based on the trader’s choice.

It operates on a scale of 0 to 100, with higher values indicating a more pronounced trend. To compute this indicator, divide the total number of “up” periods in your data set by the total number of data points. When ADX is above 25, there is a strong trend, and if ADX is below 20, there is no trend. Moreover, if the AXD is declining, it could indicate the market is becoming non-directional, indicating the weakness of the current trend. The lower band is placed at a distance from the middle line, which is usually set to two standard deviations below the middle line.

Similarly, the traders observe the minimal requirement of the indicators. Understanding Market Trend – Intraday Trading Indicators also support a trader’s understanding of the market trend by indicating the directions . Latest Insight – Through Intraday Trading Indicators, traders grasp the latest insight on pointers describing the stock market situation. Technical analysis is one of the most prominent things followed by traders before reaching the buy or sell decision. It helps traders to spot the trading opportunity through a comprehensive study of the investments. One of the most common promises made behind the volume price trend indicator is that the indicator has to be in the same direction as the price.

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