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Technical indicators for day trading

Lisa O'Neill


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Now I trade just using pure price action and volumes. But earlier, the combination of CCI, VWAP, Volumes, and MACD worked best for me. Though you have to figure out the certain action that indicators make to take a trade. For buying, mine was CCI crossing above 0, and MACD giving a buy above 0 mark, and volumes giving a confirmation.   

To get an overview for the most user technical indicators, you check the post: 


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Hello, thank you for asking! 

In order to find the best indicators that will suit your approach to day trading, it is necessary to test them out first. Usually, traders opt for a combination of RSI and moving average convergence/divergence on the screen to suggest and reinforce a trading signal.

This combination allows traders to avoid traps of short trends, where an asset is being overbought or oversold. It may not prove to be useful for all traders, and it is advisable to check out its effectiveness o in order to learn if they are working as they should.

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Certainly! In day trading, technical indicators play a vital role in helping traders analyze price movements and make informed trading decisions. These indicators are mathematical calculations based on historical price, volume, or open interest data of a financial instrument, such as stocks, forex pairs, or futures contracts. Traders use technical indicators to gain insights into market trends, momentum, volatility, and potential entry and exit points.

Some widely used technical indicators in day trading include moving averages (SMA and EMA), which smooth out price data to identify trends; the Relative Strength Index (RSI), which measures the speed and change of price movements and identifies overbought and oversold conditions; the Moving Average Convergence Divergence (MACD), which shows the relationship between two moving averages and helps spot trend changes; Bollinger Bands, which indicate potential price breakouts or reversals based on market volatility; and the Stochastic Oscillator, which compares a security's closing price to its price range over a specific period.

Additionally, the Average True Range (ATR) helps traders gauge market volatility and determine appropriate stop-loss levels and position sizes. Volume, although not a specific indicator, is also crucial in day trading, as higher volume often confirms price movements and indicates increased interest and participation in an asset.

Fibonacci retracements use key Fibonacci ratios to identify potential support and resistance levels, and the Ichimoku Cloud provides a comprehensive view of support and resistance levels, trend direction, and momentum. 

While these indicators can be valuable tools, it's essential for day traders to avoid overloading their charts with too many indicators, as this can lead to analysis paralysis. Instead, they should focus on a few indicators that align with their trading style and strategy. It's also crucial to remember that no indicator guarantees successful trades, and using technical indicators should be complemented with other forms of analysis, such as chart patterns and price action.

Before applying technical indicators in live trading, day traders should practice with a demo account to gain familiarity with how these tools work and to refine their trading approach. Furthermore, traders should continuously evaluate the performance of their chosen indicators and adapt their trading strategies based on changing market conditions. Ultimately, a combination of technical indicators and proper risk management can contribute to a trader's success in the dynamic and competitive world of day trading.

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