![]() Its values oscillate between 0 to 100, and one should remember that the higher the value higher will be the strength of the trend. Average Directional IndexĪccording to me “trend” is the best friend of every intraday trader and the ADX indicator helps us in determining the trend’s strength.ĪDX tells us whether the ongoing trend has the strength to continue going up or down. Learn more about Intraday Trading from our ELM School Module on Intraday Trading 4. Divergence occurs when the direction of the price trend and the direction of the indicator trend are moving in the opposite direction. Stochastic Divergences also help the intraday traders to determine price reversals. Trading signals are generated when %K line of Stochastic crosses %D line. ![]() ![]() The default look-back period is 14 days which can be changed according to the trading style of the traders, for example, intraday traders can use shorter period Stochastics. Highest High = highest high for the look-back period Lowest Low = lowest low for the look-back period %K = (Current Close – Lowest Low)/(Highest High – Lowest Low) * 100 Stochastic Indicator is calculated using the below formula: Stochastic was developed by George C Lane in 1950’s. When doing intraday trading it is important to analyze the momentum of the stock in which we are trading. Stochastic is a momentum indicator that has been around for a long time and is suitable for both intraday trading and also swing trading. I would strongly recommend watching our webinar on INTRADAY TRADING WITH VWAP INDICATOR if you want to learn more about intraday trading with this indicator. You can sell at the VWAP in the direction of the trend. Similarly, a bearish trend can be confirmed when the price moves below the VWAP line. We can enter the stock in this particular condition on a retracement to VWAP in the direction of the trend. This means that the price is above average volume and the trend is positive. This indicator indicates a bullish trend when the price of a stock is above VWAP. VWAP is a volume indicator of the ratio of the value of a stock traded in a particular time to the total volume traded at that stock for a particular stock. When trading intraday, traders need to track the volume in the stock. The second intraday trading indicator which I would suggest is VWAP- Volume Weighted Average Price. On the other hand, a sell signal is made when the Super Trend closes above the price and the colour turns red. This indicator indicates a buy signal when it closes below the price and the colour changes to green. Supertrend indicates that the trend is in the upward direction when it is placed below the bars and the trend is in a downward direction when it is placed above the bars as shown above. The average true range (ATR) plays an important role in ‘Supertrend’ as it uses ATR for computing its value and signals the degree of price volatility. So, when we construct the Supertrend indicator, we generally use the default parameters-10 for Average True Range (ATR) and 3 for its multiplier. It is a very simple indicator that is constructed with just two parameters- period and multiplier. This indicator is plotted on the price chart and the current trend can simply be determined by its placement vis-a-vis price. ![]() Let’s start our discussion with the Supertrend indicator that can be used as an intraday trading indicator. Bottomline 6 Top Indicators for Intraday Trading: 1.
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