The Best Indicators For Day Traders

Summary

The Trading Farmer recommends keeping day-trading charts simple, using VWAP (Volume Weighted Average Price) as the main indicator and the 20 EMA only occasionally. He says VWAP is an intraday indicator—not intended for daily charts—and is widely watched by day traders.

He describes VWAP as a potential support or resistance level and a reference for judging price strength:

• Price above VWAP: Generally signals strength or bullishness.
• Price below VWAP: Generally signals weakness or bearishness.
• Traders might look for a bounce off VWAP as support or use VWAP as a possible profit target for a position entered below it.
• He also trades breaks through VWAP, which he says may be followed by a price pop.
• As a long-biased trader, he tends to back away from stocks trading below VWAP.

He emphasizes that trading decisions also involve patterns and candlestick reading. He cautions that adding too many indicators can complicate a chart. His broader principle is “less is more”: use fewer indicators and take fewer trades.

Instruments and Indicators Mentioned

• Stocks
• VWAP
• 20 EMA, used occasionally

Cautions and Disclosures

• Day trading is not easy money; traders need to know what they are doing and follow their rules.
• The presenter says his results are not typical.
• No explicit “not financial advice” statement appears in the subtitles.

Presenter and Source

The Trading Farmer, answering a viewer’s question from Diber/Diberg in Dallas, Texas.