Painting a Picture

So whats the best indicator to use when day trading? Well I don't think there is any indicators that work often. You are wasting your time looking for an the BEST indicator. There is none, they give far to few reliable, trade-able signals to be bothered with. What reliably works is price patterns. Support/Resistance/Trends/Higher Highs/Lower Lows/OHLC patterns etc.
Sure you can find times on charts when an indicator is signaling something and seems to work but its just not often enough and the good signals don't out-way the times that they give you false signals or lagging signals or to early. Its the Price you trade not an indicator. Your trade is only good if its higher than you bought it (a price pattern) it is of no help to your account if you brought something and its lower but the RSI is over sold (Indicator pattern)

With that said the most helpful thing I have on my candle charts besides volume and a MA or two is a bar count down. The big money print the bars that they want and do most of the work in the last 1/4 of the period. Have a look at the trap that played out for the to keen in the SPI. This happens very regularity. Bars that look like good trade entries right up to 10 seconds to good all of a sudden turns bad as some high volume action reverse the play, trapping all that had got in on a not yet complete signal.

A very important tool to use when trading is replaying bad trades. Its hard to make clear judgments when looking back at static charts at the end of the day to see why you entered a trade and what went wrong as its only show where each bar finished. I use Ninja Trader to capture the days play and then am able to replay and see how things played out and how I can could of done things differently. Many time the action like above stand out like dogs balls and gives you something else to look for that is far more useful that some lagging indicator signal from the last 7, 14, 21 whatever bars, that will not tell you what is going to happen to the next 7, 14, 21 whatever bars.

Comments

[Spud Mack]

BEST indicator is the P/E ratio compared to the industry. Works every time.

[THT]

Spud Mack You have got to be Joking!!

How the bloody hell is that going to help you trade intraday???

[SpiBok]

Aaaaahhh, the old "Works every time". If I had a penny for every time I have heard that.....