As a Intraday or Positional trader, you always wonders what is the best time to enter or exit the stock. Technical analysis will help you with this. But for technical analysis, you should know which indicators to use and how to use it.In this article I will show you Most Accurate Intraday Trading Indicators.
1.Relative Strenght Index (RSI):
This widely used indicator is developed by J.Welles Wilder. Using this indicator we can identify trend reversal. Value of RSI oscillates between 0 to 100 . Zero is Oversold and Hundred is over-bought.
Eg: RSI < 20 : Stock likely to go up.
RSI >90 : Stock Likely to go down.
From my experience, RSI gives best result in 15 Min timeframe for Intraday Trading and 1 Hr Timeframe for positional Trading.
Check for Buy and Sell Signal in below Chart using RSI.
2. Moving Average Convergence Divergence:
This indicator is also known as MACD and developed by Gerald Appel. It consists of Moving average of 12 and 16 periods.
The MACD is calculated as follows:
MACD Line = 12day EMA – 26day EMA (Black)
Signal Line = 9day EMA of MACD Line (Red)
EMA stands for exponential moving average. This indicator will generate signal based on crossover of MACD and Signal line.When MACD line moves above Signal line a Buy signal is generated. This will be strong buy signal if it takes place above Zero Line. similarly if MACD line moves below signal line then its Sell signal and its strong sell signal if crossover takes place below Zero line.
Check for Buy and Sell Signal in below Chart using MACD.
3. Bollinger Bands:
This indicator is designed by John Bollinger in 1980. It consist of 3 bands. Upper band, Lower Band and Middle band. Upper band is +2 deviation from 20 SMA and lower band is -2 deviation from 20SMA. Generally price oscillates between lower and upper band. Bollinger bands widens with increase in volatility and vice versa.
My favorite trading strategy with Bollinger band is when Price crosses middle band from upper side then go for short with target of lower band. If price crosses middle band from below then go long with upper band as target. This strategy has almost 80% success ratio.
Check for Buy and Sell Signal in below Chart using Bollinger Bands. Both targets are achieved within few Minutes.
4. Commodity Channel Index:
Commodity channel index also know as CCI is developed by Donald Lambert. As name suggest this was developed to use for commodity market but this is quite useful for stock market as well.
CCI has +100 , 0, -100 level. If CCI value is Positive then the stock is in uptrend and if CCI value is negative then stock is in downtrend. You can use this indicator with RSI to find out OverBought and OverSold conditions.
Check Buy & Sell Signal in below chart using CCI Indicator.
Supertrend is my favorite indicator. It’s very user friendly indicator which generates Buy and Sell Signals. SuperTrend use Average True Range for calculation of Buy and Sell Signal.
Default setting for this is Period: 7 and Multiplier : 3 . But if you want to use it for Intraday then you can use Multiplier: 2.
I have got good result with 14 and 3 setting. You need to combine Supertrend with MACD to reduce false signal.
Check Buy & Sell Signal in below chart using SuperTrend Indicator.
That is it for now. Hope you have liked the article. Please feel free to comment if you need any help.