Day trading indicators are important tools every trader needs.  When you’re day trading, you have to be able to make split second decisions. Those decisions can be the difference between profit and loss.

Technical indicators can help slow down the noise of price movement. However, too many day trading technical indicators can make your charts messy and hard to read.

It’s all about finding a few that work without loading down your charts. Read our post on how to read stock charts for beginners if you’re new or need a refresher. Charts are the bread and butter of trading.


The stock market is a tug of war between buyers and sellers. As a day trader, you’re buying and selling stocks within seconds or longer. Depending on your strategy, you’re apart of that fight as a buyer or seller.

Day trading indicators aren’t bad or good. You’ll hear people swear by them and people who hate them. They are there as a tool and nothing more.

One thing trading indicators are good for is signaling reversals or giving help with buy and sell signals. Technical indicators are used to predict future trends. It’s important to remember that they’re not a crystal ball.

Above all, they’re tools. When used properly, they give confirmation as well as a guide. Of course you can’t have day trading indicators by themselves. You also need candlesticks.

Candlesticks are the foundation of technical trading. It’s when candlesticks are coupled with technical indicators that the bigger picture is painted. It’s important to know what bullish candlesticks, bearish candlesticks and doji candlesticks mean and look like.

Day Trading Indicators

Day trading indicators in moderation is key. All you need are 2-4 indicators that you’re comfortable with.


MACD also known as the Moving Average Convergence Divergence can be used as a day trading indicator. This is a momentum indicator that follows the trend. It functions as a tool for buy and sell signals.

MACD crossovers are a popular day trading strategy. When the MACD falls below the signal line it’s seen as bearish. Conversely, when it crosses above the signal line it’s bullish,

In other words, when the MACD crossover is bearish, if you’re long, then it is a signal you might want to sell. The opposite is also true. A bullish MACD crossover is a buy signal.


Moving average lines are also day trading indicators. In fact, moving averages are really popular trading indicators. They smooth out price movement from all the fluctuations.

You have simple moving averages and exponential moving averages. The simple moving average formula forms over a defined period of time. Whereas, the exponential moving averages give more importance to recent price changes.

Moving average crossovers are also strong buy and sell signals. You’ll notice that price tends to stick close to moving average lines, especially when the stock market or certain stocks are trading sideways.

Moving averages also push price up or down depending on the trend they’re in. When price moves away from the moving average lines, they always gravitate back to them.

Moving average lines provide equilibrium to stocks as well as provide support and resistance. The VWAP trading strategy is also a popular strategy among day traders.

Day Trading Indicators

This is the 1 minute chart for Alibaba. There are 4 moving average lines on here. The 9 and 20 exponential moving averages as well as the 50 and 200 simple moving averages.


The RSI or Relative Strength Index is an indicator that tells you when a stock is overbought or oversold. An over extended stock will correct itself.

Another thing to remember is that when a stock trades in an oversold or overbought range, it’s also confirmation of the strength of the current trend.

It’s a popular momentum indicator because it compares gains and losses over a specified period of time. Hence, the confirmation of a trend’s strength.


Bollinger bands are another form of day trading indicators. There is an upper and lower band that form above and below candlesticks. The more volatile the stock, the wider the bands get.

On the other hand, the less volatile the closer the bands come together. When the bands squeeze, traders see it as a signal for  future volatility. Volatility is the the bread and butter of day trading.

Without volatility, price wouldn’t move much. We teach day trading live each day within our trading service.


Patterns are a huge part of stock trading. When patterns are coupled with day trading indicators it gives traders a clear picture of an upcoming move. Patterns do break down all the time so, of course, it isn’t a crystal ball.

When day trading indicators are bullish and the patterns are bullish, you have the confidence to go long in a trade. The opposite is also true. If you see tweezer top patterns and the indicators are going bearish, you know to get out of a trade or take the short side.

Patterns and indicators when used properly give you a great chance to be a successful trader.


Day trading indicators are tools to be used for confirmation. Some traders like them and some don’t. There’s no right or wrong on what indicators you do or don’t like. Technical indicators don’t produce profits. It’s you as a trader, taking the time to learn, study and practice.

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