The Best Day Trading Indicators

If you are just getting into the world of trading, whether Forex, cryptocurrencies, or otherwise, something that you definitely need to know all about are trading indicators. In case you have no idea what trading indicators are no worries because we will explain this in great detail below. However, with that being said, what you need to know here is that day trading indicators are important tools that provide you with crucial information that will determine exactly how and when you trade.

The bottom line is that without good day trading indicators, you just aren’t going to make any money and you aren’t going to be successful at all. Today we’re here to do a bit of a guide for newbies in terms of day trading indicators, we’re going to talk about what exactly day trading is, what indicators are, what indicators tell you, and what the best day trading indicators out there are. Let’s get right to it.

 

What is Day Trading?

Before we start talking about day trading indicators, it’s probably a good idea for you to get a basic definition of what actual day trading is. Now first and foremost, day trading is most often characterized by large degree of technical analysis, and it requires a lot of self discipline and objectivity. Now, day trading usually refers to a practice of buying and selling a specific security in a single day.

Therefore it can also be known as intraday trading as it all happens over the span of one day. For the most part, day traders will utilize a lot of leverage as well as a variety of short term trading strategies to capitalize on even the smallest of price movements that occur in extremely liquid currencies and stock markets.

 

What are Indicators?

OK, so now that you know what day trading is, it’s a good idea for you to get a basic definition of what a day trading indicator is. So the most basic definition of an indicator is a tool or set of tools that is applied to a trading chart that can help to make the market more clear.

The main purpose of indicators are to provide you with a certain set of information, such as when an asset is overbought or oversold, what the market trend is like, and more.

Moreover, trading indicators are mathematical calculations that are plotted as lines on a price chart and it helps traded to identify certain signals or trades that can be placed. Indicators usually refer to a technical chart pattern that is derived from the price, volume, or the open interest of a given asset. Of course there are many different types of indicators that tell you different things.

 

What do Day Trading Indicators Tell Us?

As mentioned above, day trading indicators are designed to provide you with a variety of facts about a certain security or asset. So what exactly do trading indicators tell you? When it comes down to it, there are four main pieces of information that you can gleam from any great day. Trading indicator.

 

The Trend

The first thing that a trading indicator might tell you is the trend of the market, or in other words, in what direction the market is moving. Generally speaking, trend indicators are also known as also oscillators, as they usually move up and down between highs and lows.

Volume

The second type of day trading indicator out there is the volume indicator and these change with time. his type of indicator indicates the number of stocks that are being bought or sold over a specific amount of time. When the price of a security or asset changes, the volume indicator will indicate how strong that move is.

Momentum

The third thing that indicators might tell you is what the momentum of an asset is like. Or in other words, momentum indicators tell you the strength of a certain trend. Momentum indicators will also signal if reversal is in the near future.

Volatility

The fourth type of indicator out there is the volatility indicator, which is in fact one of the most important ones of all, as it indicates how much a price changes over a given. If there is high volatility means there are big price moves.

The Best Day Trading Indicators

Now that we know what day trading indicators are and what they can tell you, let’s take a quick look at the very best intraday trading indicators out there.

Bollinger Bands

The Bollinger Bands indicator is a volatility indicator that tells you how volatile a market is. When the market is moving and volatility is high, the bands widen and increase the gap between them, and the gap between bands is small when volatility is low.

Moving Averages

Moving averages are intraday trading indicators that provide you with useful information about the momentum of a market trends and trend reversals, as well as stop loss and stop loss points. Moving averages are all about allowing traders to find opportunities in the direction of the current trend.

Commodity Channel Index

The Commodity Channel Index or CCI allows you traders to identify new and emerging market trends. This indicator provides you with values ranging from negative 100 to positive 100 an if the value is positive in indicates an up trade and if the value is negative, it indicates a downtrend.

Relative Strength Index

The relative strength index, or RSI for short, is another momentum indicator that features a single line that ranges from zero to 100. This indicates if a stock is overbought or oversold, and if the reading is above 70 it indicates that a security is overbought and if it is below 30 it is oversold.

Stochastic Oscillator

This is another fantastic day trading momentum indicator that provides you with information about the closing price of a stock, with a range of prices over a certain period of time.

 

The Best Trading Indicators – Final Thoughts

There you have it folks, all of the information that you need about the best day trading indicators out there to get started.

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