Day traders are more interested in price movements that happen within the trading day and are driven by market sentiment than those driven by market fundamentals over weeks and months. As such, day trading signals are based on technical analysis of price action. To profit from day trading signals a trader needs to exercise discipline in working with his or her trading platform and data feed. The day trading signals that one relies on most may vary a bit with what you are trading from stocks to commodities and futures, to foreign currency pairs.

Best Day Trading Signals

The most-basic and best day trading signals are these:

  • Moving averages
  • Moving average convergence divergence (MACD)
  • Relative Strength Index (RSI)
  • On-balance Volume (OBV)

Moving averages serve to “smooth out” price information to remove the “static” the normal fluctuations of the market. They can also highlight a range within which an equity trades. The MACD is an oscillating indicator that highlights tends and helps spot buy and sell opportunities. The RS signal is useful in seeing if an equity is oversold or overbought. And, the OBV is typically used to confirm trends.

Day Trading Buy Sell Signals

Day trading buy sell signals occur with price movement. With moving averages, futures contracts, currency pairs, or stocks often trade within a range defined by a pair of moving averages. A buy signal occurs when the price approaches or hits the lower range defined by one of the averages and a sell signal happens when the price hits or approaches the upper range as defined by the other moving average. Successful day traders use two or more day trading signals to first spot and then confirm buy or sell opportunities.

Crude Oil Day Trading Signals

When day trading crude oil futures the key is being able to see overbought and oversold conditions at any given price. Many day traders rely on the RSI or relative strength indicator to help them spot these opportunities. A day trader will commonly have their eye on more than one indicator such as a moving average pair if oil prices are fluctuating between one moving average and the other. To learn how to make the most of crude oil trading signals, novice day traders will do well to learn the DayTradeSafe system of rules-based entry and exits from day trades of crude oil futures.

Crypto Day Trading Signals

You can buy and sell cryptocurrencies but you cannot day trade cryptocurrency futures or options. Because cryptocurrencies have not fundamentals to analyze, trading cryptocurrencies comes down to technical analysis of price movement and a fair amount of hoping that you make a profit and do not get caught in a massive downturn. That having been said, moving averages, moving average convergence divergence, the relative strength index, and on-balance volume can all be used as crypto day trading signals.

Stock Day Trading Signals

Technical analysis is the backbone of stock day trading. But, there are large caps stocks and indexes that track the S&P 500 that trade at high volume and liquidity and there are penny stocks with little volume and miniscule liquidity. Stock day trading signals based on technical analysis work well with high volume and liquidity and they can be dangerous when trading penny stocks. The most successful traders are commonly those that pick a stock which moves back and forth between a pair of moving averages and confine themselves to trading what they know. A heads up for stock trading is that you can only write off $3,000 in losses because of how day trading taxes treat stocks. A better choice in this regard is to trade commodity futures.

Forex Day Trading Signals

In general, moving average, moving average convergence divergence, relative strength index, and on-balance volume are all useful when trading currency pairs. An important factor to consider if you are going to day trade Forex is that you are trading two currencies for which there are two sets of factors that determine the strength of that individual currency against others and against the other in the pair you are trading. It is generally useful to trade during business hours for at least one of the currencies you are day trading.

Futures Day Trading Signals

At DayTradeSafe our preferred day trading equity is the commodity future. You do not need to be concerned about being a pattern day trader as with stocks and tax treatment if better. The relative strength index is typically very helpful when trading futures on anything from gold to corn and soybeans to coffee, copper, and live cattle. However, moving averages, convergence divergence, and the on-balance indicator are commonly used as guides. With all day trading signals, the most important aspect is not so much the signal itself as the discipline you use in applying it to your day trading. Consider working with DayTradeSafe to make your day trading as successful as possible.

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