The Best Indicator for Day Trading
Whether you trade stocks, forex, options or any other market knowing which technical indicator is the most accurate will greatly help your chances of success when it comes to intraday trading.
Let's face it..
Day trading isn't easy.. not for anybody.. if you want to succeed then you need to have the right tools and the right mindset..
With 100s of technical indicators out there included with every charting platform it can be very difficult to figure out which one is the best indicator for day trading?
From the Relative Strength Index (RSI), to MACD, Bollinger bands, moving averages and stochastics how do you know which is right for you?
Well we had the same problem a few years ago and we weren't happy with the current freely available trading indicators out there so we set out to develop a highly unique and profitable trading indicator that could be used on any asset and any timeframe, whether it's stocks, forex, options and whether it's on the 1 minute, 5 minute or 15 minute chart we wanted something robust and durable that would last the test of time..
You see most trading indicators are vague in their interpretation and uses, they usually come with many caveats and only applicable in certain situations..
Not with Buy Sell Bands
Our custom technical indicator tells you exactly when to buy, sell and close your trades on any asset and any timeframe.. by showing you entry and exit signals on every chart you look at..
It works on the highly popular TradingView charting platform.. you only need a free account and can easily add Buy Sell Bands in a matter of minutes and it will show on every chart you look at..
For example, as of the time of writing this article here is today's 1 minute candlestick chart of AAPL stock with the Buy Sell Bands indicator showing exactly when you should buy, sell and close all your trades..
The idea is that you buy below the green line and exit at the blue line and vice versa for shorting.. you sell short above the red line and exit at the blue line.. this is also know as a "mean reversion" trading strategy and is very popular with professional traders and hedge funds..
The other indicator showing at the bottom of the above chart, is our Range Strength Indicator which is also included with Buy Sell Bands.
The Range Strength Indicator tells you whether the market is ranging or trending.. if the bars are green it means the market is ranging.. however if the bars are red then the market is considered to be in a trending mode... and that's when we don't want to use the Buy Sell Bands..
Buy Sell Bands are designed to be used in a ranging market.. that is.. when prices are oscillating up and down within a range.. which with all markets is about 80% of the time!
Take for example this 15 minute chart of forex pair USDJPY you can see when the market is a trending mode by looking at the Range Strength Indicator, when it shows red we ignore the Buy Sell Bands signals as we only want to trade on those signals when the Range Strength Indicator is green telling us the market is in a ranging mode and thus price should reverse back to it's average.
We would ignore this signal as the Range Strength Indicator is Red
This is why you just can't follow every signal from every technical indicator.. there is always the optimal market conditions for an indicator to work..
Some traders may confuse Buy Sell Bands with the popular technical indicator Bollinger Bands as they can appear similar.. however there are some very important differences..
The main difference being that Buy Sell Bands are specifically designed for range trading whereas Bollinger Bands like most technical indicators are vague in their interpretation and can be used for both range trading and trend trading.. which makes it confusing for us traders!
Take for example the below 5 minute chart of Crude Oil (CL) with Bollinger bands you can often see them squeeze when volatility gets tight and thus it throws off bad entry signals for reversals..
Too early a signal from Bollinger Bands
Below is the exact same chart of Crude Oil above, except with Buy Sell Bands shown.. you can easily see our indicator doesn't "squeeze" like Bollinger bands do and thus provides much more accurate entry signals for us to take trades..
A more accurate signal from Buy Sell Bands
You may be wondering.. does Buy Sell Bands just work on intraday charts for day trading?
Well.. it's also a great indicator for swing trading too.. in fact it works on any chart and timeframe since all markets exhibit the same patterns over and over.. they oscillate between trending and ranging..
Check out this Daily Chart of Disney (DIS) below.. you can see that Buy Sell Bands works just as well on the daily chart as it does on the 1, 5 and 15 minute charts you use to day trade.
One thing we know for sure is that trading is much easier when you have the right tools and a defined framework.. it takes the stress and pressure out of trading knowing where and when you should enter and exit a trade by seeing very clear signals on a chart in real time.. instead of trying to guess where you should enter and exit your trades..
In addition to the Buy Sell Bands and Range Strength Indicators we also offer private access to our Members Area where we teach specific trading strategies you can use our custom indicators with, some of these strategies can have high win rates up to 90% when performed correctly..
All you need is a free TradingView account which is the most popular charting platform online, then you can easily add the Buy Sell Bands and Range Strength Indicators in a couple of clicks and they will show on every chart you look at..
To learn more about how you can get our custom indicators today simply visit our homepage