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Top indicators for intraday trading

May 24, 2021

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Share trading is no rocket science. There are a lot of things that you need to learn. The more you learn the more you can earn from the market. The first thing that you need to master is indicators. Indicators help you predict the future price movement. In this article, we will deal with top five indicators used for intraday trading.

The right use of indicators can exponentially increase your gains. Indicators help in the following ways:

  • Predict the direction of the price movement.

  • Predict if there is momentum left in the trend.

  • Predict the profitability of the trade.

  • Predict how many people are involved in the trade using volume indicator.


Here are the top five indicators used in intraday trading.

1. Moving average


One of the most commonly used indicators in intraday trading is moving averages. Almost all the traders use this indicator. The reason behind its popularity is its simplicity in design and in use. As the name suggest, this is an average of the closing price of all the candles in a particular time period. There are many different types of moving average like 20 days moving average, 50 days moving average, 100 days moving average and so on.

2. Bollinger bands


When you go one level up the moving average, you get Bollinger bands. This is a band consisting of three lines: the upper line, the lower line and the middle line which is the 20-day moving average. The upper and the lower line is the standard deviation from the middle line. It is believed that the price movement tends to move under this band only.

3. Momentum oscillators


Stock market is a volatile place. Prices are continuously moving up and down. Momentum oscillators provide an early sign that the stock market is going to change its trend; if the price was moving upwards, now it may move downwards or sideways and if the price was moving downwards now it may move upwards or sideways. You also get to know the strength of the momentum of the stock.

4. Relative strength index (RSI)


RSI helps you identify if the share price is undervalued or overvalued. When the RSI goes below 20 it is said to be in an oversold zone. This is a sign that the stock may move upwards from here. When the RSI goes above 80 it is said to be in an overbought zone. This is a sign that the stock may move downwards from here.

5. Moving Average Convergence Divergence (MACD)


The MACD indicator consists of two lines, the MACD line and the signal line. The MACD crossover is used to buy or sell a stock. It is one of the most reliable indicators for intraday trading.

To sum up


You need to master these indicators if you want to be successful in the stock market. For trading in the stock market, you need a trading account. You can open a trading account with 5paisa which is one of the best brokers in India.

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