For Intraday trading, stock selection is vital. Select stocks with liquidity for easy buying and selling. The volume of shares traded indicates its liquidity. Stocks with some price movement and volatility give better chances of arbitrage for traders.
Intraday Trading Indicators:
Traders use charts and patterns to gauge market and stock price directions. There are different indicators used as a tool that use data to decide a trading strategy and maximise profits:
Moving Averages: Moving average chart joins the average closing price of a stock on a graph for a long period of time. This indicator makes it easy to understand the price movement trend over a period of time in a stock.
Bollinger Bands: Bollinger Band is a variant of Moving Average indicator. It charts three lines for a stock; the average closing price along with upper and lower limit. It indicates the range of movement in price in both directions from the average and helps understand how volatile a stock is.
Momentum Oscillators: At times it is not clear if there is bearish or bullish trend. Momentum oscillator is charted in 0 to 100 range to study if a stock is beginning a new trend.
Relative Strength Index (RSI): RSI is plotted as a range between 0 to 100 in an index form. The index moves with price rise or fall. Once an index reaches a certain level, traders can make buy or sell decisions.