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Top 10 Best Technical Indicators for Day Trading in 2021

Top 10 Best Technical Indicators for Day Trading in 2021

Day trading is a fast-paced trading process. You need strong strategies to take risky decisions that will bring you the highest profits. That is why trading indicators have become so useful in day trading.

As a day trader, you will find many leading technical indicators in the market. Those trading indicators are very useful in buying and selling stocks. Thus, you can acquire the maximum gain from your investment through the indicators.

The leading indicators technical analysis allows you to understand the market better. There are many more benefits of using technical indicators as well. It is always worth it to invest in technical indicators.

So, we will look into the top 10 best technical indicators for day trading in 2021 by the end of the article.

How Technical Indicators Help in Day Trading?

Technical indicators for day trading are mathematical tools. They calculate different indications and plot results on price charts and graphs. They also help traders to identify market trends and signals. As a result, day traders can create relevant strategies to invest in day trading.

Technical indicators are very helpful in share, commodities, and forex trading. But how do they work across different markets? Those indicators are designed to provide pointers and information on existing markets. Hence, traders can understand market conditions. As a result, they can make decisions that can yield the best results.

The top technical indicators provide various information. They can be the following:

  • The direction of the trend – This helps to determine market price movement.
  • The volatility of the asset – This helps to figure out the profit potential.
  • The investment market momentum – this helps to determine the overall process of profitable investment.
  • The popularity identifications measurement through volume.

Top 10 Best Technical Indicators for Day Trading in 2021

You will find various technical indicators in the market. But not all will suit you. And not all of them will give you the best output.

Here is a top 10 technical analysis indicators list for day trading in 2021.

Bollinger bands

1. Bollinger Bands

Bollinger bands are an updated version of daily moving averages. The moving average is another tool of the trade that we will learn about shortly. The method is quite popular and very effective.

Traders use this method to put 3 lines over the stock chart. These 3 lines are:

  1. Lower Limit
  2. Average Closing Rate
  3. Upper Limit

The lines determine how much the stock deviates from its standard point. This basically means the changes in the price intensity of the stock. You can figure out the asset price decrease or increase from the average price. As a result, traders can easily understand the range of the stock.

2. Relative Strength Index (RSI)

The Relative Strength Index is the complete form of RSI. This indicator shows the gain and loss of stock. The RSI score is typically between 0 to 100.

We recommend you to buy a stock when the RSI score is 70 or above. And you should sell the stock when the RSI score is 30 or less.

Yet, you cannot use this method for every stock out there. You will still have to rely upon better analysis and research to form stronger strategies.

3. Momentum Oscillators

Momentum oscillators are one of the best technical analysis indicators. The best thing about the indicator is that it considers the market volatility. This means that you will get stock price indications following market price changes.

In most cases, traders tend to overlook this behavior of the market. Another key factor of the indicator is its ability to identify market modifications.

Just like RSI, momentum oscillators also have a 0 to 100 range. The stock prices can achieve new high or low prices. This enables traders to identify possibly rise or fall in future prices.

Moving Average Convergence Divergence
Source: Brokerguide.com

4. Moving Average Convergence Divergence (MACD)

MACD is another popular day trading indicator for day traders. With this indicator, day traders can get different indications altogether. This can include the momentum, trend, and duration of the stocks.

The indicator takes into account 2 moving averages.

A negative value of the divergence and convergence means a negative trend. And a positive of the divergence and convergence means an upward trend.

5. Moving Averages

Another name of moving averages is Daily Moving Averages (DMA). DMA is one of the highly-rated day trading indicators out there. The moving average includes one single line on the stock chart, which represents the average ending rate.

Whenever the stock movement duration is long, you can rely on that moving average. The indicator considers the volatile stock prices. Thus, traders can understand the stock price movement better with this indicator.

Check Them Too

6. On-balance Volume

The on-balance volume indicator is the full form of OBV. As the name suggests, this indicator takes the stock price volume into account.

OBV is the reduction of up volume from the down volume. Up volume means the number of times the stock prices went up. And down volume is the number of times the stock prices went down.

OBV is a strong indication of market trends. When you notice a high OBV, it means that buyers will push the price high. The opposite happens when the OBV is low.

7. Exponential Moving Average (EMA)

EMA is a lagging indicator on our list. This indicator helps to find trends over a certain period. EMA gives more weight to the current market trends. It changes following the recent stock price changes. Thus, EMA is a very handy tool to determine sudden changes in trends.

8. Fibonacci Retracement

This indicator uses Fibonacci numbers for day trading indications. You can understand price reversals with this indicator. Also, this indicator is highly effective in determining price resistance or support.

9. Average Directional Index (ADX)

ADX determines the inward or upward price trends. This means that you will understand the price trend strength with this indicator. As a result, you will be able to make clear decisions on whether to buy or sell a stock.

10. Commodity Channel Index (CCI)

CCI is another common technical indicator on our list. This indicator is widely popular for its accuracy. Traders can identify trends by measuring current prices with average price levels.

The CCI level is between -100 to +100. A positive CCI is favorable for the bulls, whereas a negative CCI is favorable for the bears.

Combining Different Technical Indicator Together

You can also use a combination of technical indicators for day trading. For example, you can use MACD and RSI together to cater to a strong trading strategy. In this combination, RSI acts as an indicator of oversold and overbought stocks. And MACD provides the price trends.

Whatever combination you choose, you need to be strategic on that as well. Among the two indicators, one will be the lagging, and the other will be the leading indicator.

The leading indicator will provide the trading signals. In contrast, the lagging indicator will authenticate the signals of the leading indicator.

You should also consider choosing two different types of technical indicators. Always try to avoid combining similar types of trading indicators.

FAQs: Best Technical Indicators for Day Trading

Which Technical Indicator is the Most Accurate?

Not one technical indicator can be listed as the most accurate. The top 10 listed indicators work the best for day trading. And you can rest assured to get the best results if you use them properly.

Which is Better, MACD or RSI?

Both MACD and RSI are extremely effective in day trading technical analysis. But they have different functions. If the market changes most of the time, you can make use of MACD. But RSI works best to determine asset prices and their trends.

How are Technical Indicators Used Together?

Technical indicators work best when you use them together. And it is best if you pair two different types of indicators together. One indicator will work as the leading, and the other will work as a lagging indicator.

How Do You Combine Trade Indicators Like a Pro?

Combining indicators like a pro is an effective task. You can do that by following technical indicators pairing techniques. There are numerous resources available on the internet that you can go through.

How Useful are Technical Indicators?

Technical indicators are extremely useful in identifying future predictions. They take past data and predict trends. As a result, day traders can create the strongest and most effective strategies.

Which is Better, SMA or EMA?

It is always hard to choose between two different technical indicators. SMA focuses on the average asset prices whereas, EMA focuses more on the weighted prices of the assets. Both are extremely handy in determining trends.

Which Technical Indicator is Considered Bullish?

The last technical indicator on our list is considered bullish. The name of the indicator is Commodity Channel Index (CCI).


Technical indicators can become the best friends for day traders. They help traders to understand the market and the asset price trends. These are extremely crucial in day trading. You will need to be always on your toes with the best strategies you can create.

To do that, you can utilize any of the listed top 10 best technical indicators for day trading. You can even combine them to make the best use of different features. The indicators are actually best when you use them in pairs.

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