Best Indicators for Scalping in Intraday Trading

Best 5 Scalping Indicators – Simplified Overview

Scalping requires quick decision-making and reliable indicators. Here’s a condensed guide to the top tools used by scalpers:

1. Moving Averages (MAs)

• MAs help identify market direction by averaging price data over time.
• Best for scalping: Use short-term MAs (5, 8, 13-period) on 1-2 minute charts.
• Signal: A 5-period MA crossing above a 13-period MA can signal a buying opportunity.
• Example: If the 5-MA crosses above the 13-MA at ₹100, it may indicate an uptrend.

2. Relative Strength Index (RSI)

• RSI gauges price momentum and potential reversals.
• Range: 0 to 100; above 70 = overbought, below 30 = oversold.
• Use for scalping: Look for divergences on short timeframes.
• Example: A weakening RSI while price rises could suggest a short opportunity.

3. Bollinger Bands

• These measure price volatility with a middle MA and two outer bands.
• For scalping: Price touching the upper band may indicate overbought; the lower band may signal oversold.
• Example: If price hits ₹105 (upper band) and moves back toward ₹100 (middle band), it could signal a short.

4. Stochastic Oscillator

• Shows price momentum relative to recent highs/lows.
• Settings: (5,3,3); values above 80 = overbought, below 20 = oversold.
• Signal: %K crossing above %D below 20 can mean buy.
• Example: A crossover under 20 may offer a long entry.

5. MACD (Moving Average Convergence Divergence)

• Tracks momentum via two EMAs (12, 26-period).
• Scalping tip: Look for MACD line crossing the signal line.
• Example: If MACD (-0.5) crosses above the signal line (-0.6), it may signal a quick bullish move.

Combining Indicators for Stronger Trades

• Trend: Use MAs.
• Entry: Confirm with RSI/Stochastic.
• Momentum: Crosscheck with MACD.
• Exit: Use Bollinger Bands.

Using these tools together can refine scalping entries and exits, helping improve accuracy in high-speed trades.