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Best Combination of Technical Indicators for Intraday Trading

Best Combination of Technical Indicators for Intraday Trading

Intraday trading is not just about choosing the right stocks but also entering and exiting at the right price and time. But the question is, how to achieve that accuracy? The answer is technical analysis. While there are a lot of technical indicators, there is some best combination of technical indicators for intraday trading.

To generate calculative signals, technical indicators read the market trends, price, volume, interest, and other factors. Therefore, they play an essential role in intraday trading as in this trading segment, and you need to utilize the little intraday trading time and make the best out of it.

Let us now look at some combinations that can help you in boosting the profits earned in intraday trading.

How To Combine Indicators For Intraday Trading?

There has been a constant debate about the importance of technical indicators in intraday trading for a long time now. Some traders find it absolutely necessary, while others often don’t believe in accuracy.

While there are a lot of technical indicators available to the traders, they individually can generate false signals sometimes. So what can you do to ensure that you are taking guidance of the right indicators?

You can use the assistance of other technical indicators. There are the certain best combinations of technical indicators for intraday trading that you can use.

But before that, let us have a look at how many kinds of indicators is present.

  • Momentum Indicators- They are used to measure or define the fluctuations or momentum of a stock. They also determine the rate by which the market is changing for a specified time period.
  • Trend Following Indicators- These indicators measure where and how strong an ongoing trend is in the market in a given time period.
  • Volatility Indicators- As the name indicates, volatility indicators are used to measure the volatility of the stocks. It defines how much higher or lower stock a stock price has moved from its mean price.

There are various indicators in various categories. Let us name a few of them.

Now looking at the three types of indicators, it is crucial to combine the right indicators; failing to do so can also lead to fall signals.

There are some mistakes that traders often make in combining the technical indicators.

Traders often combine two same categories of indicators together. For example- if you combine two momentum indicators like RSI and moving average together, they will give you duplicate results.

It, therefore, becomes difficult to trust the indicators at this time. Moreover, using similar indicators and duplicate results can also force the trader to believe that the information is apt.

This can further induce wrong decisions and significant losses.

So, how can you combine the technical indicators for intraday trading to maximize your profits?

Always make sure that you combine two different categories of indicators. This makes sure that you are getting the most appropriate signals.

ADX, RSI, Bollinger Bands

Now the RSI is a momentum indicator, and ADX, which is a trend indicator, compliments it. Now here, the Bollinger bands can be used to determine the volatility. So you see how the three different indicators can work together.

Let us understand this with the following screenshots.

Case 1- Now, in this screenshot, the Bollinger bands are showing a breakout, meaning that the trend will now move downwards, and the RSI accompanies this.

The RSI range around 70 indicates that the stock has been overbought and might face a bearish or consolidated phase.

ADX, on the other hand, signals a strong strength of the trend.

So, what should be the decision of the trader in case signals of two indicators mismatch each other?

In that case, it is good to combine one more indicator for your analysis.

Here the band of third indicator, Bollinger Bands, are wide open that depicts the volatility in the stock and further even after the breakout, the price reverses and hence one can expect the downfall in prices.

This is an ideal situation for the traders to go short.

Case 2- In this case, all three indicators are signaling a low volatility trend:

  • Bollinger bands are narrow.
  • ADX value is below 20
  • RSI is consolidating near the value 5

Thus, one should not take any trade decision during this period.

2. Bollinger Bands and MACD

MACD or moving average convergence divergence is a trend indicator where Bollinger bands help in detecting the volatility.

A trader looking at MACD must look for the bullish or bearish crossovers to go long or short respectively.

On the other hand, to check the volatility of the stock, one can consider another indicator in the combination, Bollinger Bands.

Let us have a look at how these indicators work together.

Looking at the Bollinger bands, if you are planning to take entry at the point that is marked in the picture below, it is nearing a good signal as the price is crossing the moving average line from below. So, in this case, there are chances that the trend will go upwards.

Correspondingly, looking at the MACD crossover it is too giving a bullish crossover signal and hence one can go longer depending upon the signals obtained from these two indicators in combination.

This confirms that it is the right time to take entry in this particular stock.


Technical indicators are really useful in guiding intraday traders and enjoying the advantages of intraday trading. And if you use the best combination of technical indicators for intraday trading, your chances of profits also increase. But keep in mind that more is not beneficial always.

Even if you are combining indicators, make sure that you don’t use a lot of them. It might confuse you and force you to make wrong trading decisions. So, use the right combinations and reap the benefits.

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