Becoming a professional day trader is a challenging journey that demands discipline, effective risk management, and a comprehensive understanding of the market. Proficiency in various technical indicators is crucial for success, as they provide insights into market conditions, psychology, and the supply and demand of securities.
Among these indicators, moving averages play a prominent role in assessing trend direction, support, and resistance. Traders often choose between the simple moving average (SMA) and exponential moving average (EMA) based on the time frame being analyzed, with a preference for EMA due to its nuanced approach.
Another essential indicator is the on-balance volume (OBV), which measures the flow of positive and negative volume over time, validating trends and potential breakouts. The relative strength index (RSI) is a valuable tool for gauging momentum and trend strength, indicating overbought or oversold conditions. RSI also aids in assessing divergence and evaluating support and resistance levels. These indicators, such as moving averages, OBV, and RSI, constitute only a fraction of the essential tools in a trader’s toolkit.
To learn more about the indicators that day traders are utilizing to find success, continue reading on to the infographic accompanying this post.
Top Trading Indicators Toolkit, provided by NinjaTrader, an industry leading future trading