A:

Several momentum oscillators that are effective in daily or weekly trading are also effective in intraday trading, though not all. Most momentum oscillators have adjustable time-period inputs, but their interpretation remains the same whether you are measuring hours or months at a time.

Stochastic oscillators are very popular among day traders because they are built to safeguard against false signals. False signals are damaging to any trading strategy, but day traders are perhaps most susceptible. Stochastic oscillators measure a price's relative position to recent highs and lows, assuming that trading occurs near the recent high during an uptrend and near the recent low during a downtrend. If you are concerned about false signals, a slow stochastic could be an effective tool.

The volume oscillator can also be used in day trading, but it may be limited based on your trading software because it relies so heavily on continuous inputs.

The ultimate oscillator was designed by Larry Williams to address problems with using an oscillator over different periods of time. The three cycles of the Ultimate Oscillator can be adjusted for intraday use, and trading signals can be generated based on the divergences between the oscillator line and the price action.

There is some danger in treating day trading as though it were fundamentally different than more traditional trading – indeed, the proliferation of get-rich-quick schemes centered around day trading prey on such a concept. Day trading may be more complex and more volatile than traditional trading and investing, but its characteristic liquidity and arbitrage-heavy activity is just located on an extreme end of the same spectrum.

RELATED FAQS
  1. What are the best technical indicators to complement the Stochastic Oscillator?

    Explore the function of the stochastic oscillator indicator, and discover other technical indicators traders use to complement ... Read Answer >>
  2. What is a common strategy traders implement when using the Ultimate Oscillator?

    Learn what the ultimate oscillator is and find out about a common strategy traders use with the oscillator to signal entries ... Read Answer >>
  3. How do I use Stochastic Oscillator to create a forex trading strategy?

    Learn about the stochastic oscillator and how to it is used to create an effective forex trade strategy, including how to ... Read Answer >>
  4. What are the main differences between the Williams %R & Ultimate Oscillator?

    Read about the technical changes Larry Williams made to his trading tools, from the Williams %R oscillator to the Ultimate ... Read Answer >>
  5. How can a business eliminate deadweight loss from government regulation?

    Understand the basics of the stochastic oscillator and how to use this momentum metric in tandem with other indicators to ... Read Answer >>
  6. How does a swing trader use the stochastic oscillator?

    Learn how the stochastic oscillator is used as a momentum indicator in swing trading, and understand how the oscillator is ... Read Answer >>
Related Articles
  1. Trading

    Use The Percentage Price Oscillator: The "Elegant Indicator" For Picking Stocks

    Technical analysis is basically an attempt to disprove the credo that "Past performance is not indicative of future results." The percentage price oscillator, which measures momentum, is among ...
  2. Trading

    How To Profit From The "Night and Day" Aroon Oscillator

    “Aroon” is a Sanskrit word loosely translated as the transition from night to day, appropriate for a measure that attempts to determine when a trend is about to develop into something of substance. ...
  3. Trading

    MACD And Stochastic: A Double-Cross Strategy

    The stochastic oscillator and the moving average convergence divergence (MACD) are two indicators that work well together.
  4. Investing

    Stochastics: An Accurate Buy And Sell Indicator

    Find out how stochastics are used to create buy and sell signals for traders.
  5. Investing

    Premier Stochastic Oscillator Explained

    This oscillator has been used since the 1950s by traders and investors to anticipate areas where the market may change direction.
  6. Trading

    Use The McClellan Oscillator To Measure Market "Breadth"

    How broad is the market? And, once we answer that question, how can we use that answer to our advantage?
  7. Trading

    Divergences, Momentum And Rate Of Change

    Divergences may signal a change in market direction, but traders must also identify the speed of that change.
  8. Trading

    Do You Have The Right Settings On Your Stochastic?

    Use these helpful tips to unlock Stochastics' full potential.
RELATED TERMS
  1. Stochastic Oscillator

    A technical momentum indicator that compares a security's closing ...
  2. Oscillator

    A technical analysis tool that is banded between two extreme ...
  3. Chande Momentum Oscillator

    A technical momentum indicator invented by the technical analyst ...
  4. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used ...
  5. Williams %R

    In technical analysis, this is a momentum indicator measuring ...
  6. Sine Wave

    An geometric waveform that oscillates (moves up, down or side-to-side) ...
Hot Definitions
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.
  2. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  3. Return On Equity - ROE

    The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability ...
  4. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  5. Whole Life Insurance Policy

    A life insurance contract with level premiums that has both an insurance and an investment component. The insurance component ...
  6. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
Trading Center