The mechanics of the market are constantly changing and this has resulted in people relying much more heavily on various algorithms to execute trades. The investor can still use intraday stock charts to great advantage but you will also need some foresight when it comes to your trading and there are several ways to acquire the foresight you need.
It is important to try to use a rather longer time frame on your chart if you are to understand the big picture, let me explain:
It is important to try to use a longer term time frame on your day trading chart if you intend to understand the big picture. Therefore if you trade using the ten minute charts then it pays to look at the hourly and even daily charts so you can get more of an idea on what the market is doing. For those of you who are scalpers, that is people who take trades with the idea of only making 1% or less profit the larger time frame charts will enable you to remove those of no interest.
The day trading chart can be used to show the market internals such as the TIKI, TRIN, TICK, fair value and many other market internals are often very useful to your trading. Personally I try to add at least two market internals to my parameters list when I am back testing one of my intraday strategies.
Most good day trading software or day trading charts will allow the insertion of technical indicators (such as RSI and morning averages) on the market internals charts you are using. You may wish to test out this feature of your day trading software to determine if this function will be of use to you or
not depending on your day trading styles.
Above all make sure you do your homework at the end of every day so you can determine which symbols are likely to go up the next day and which are likely to go down, of course there are no guarantees in this market just like any other but the use of a good day trading chart will enable you to determine which direction the market is most likely to go in the next day so you can focus on that for your next trading session.
Hopefully this knowledge will help you become a better day trader and help you avoid the many pitfalls out there.
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