How do you know when to enter, hold, or exit a trade?

Certainly, you rely on your trading plan and many

other factors, but indicators will also play a large role in your results. Derived from both historical price
data and predictive tools, indicators drive the technical analysis of a trade, and they are a critical part of
any trading strategy.

This ebook provides insight into a handful of our favorite trading indicators. It also highlights Simpler
Trading’s own traders who use these indicators every day, and have fine-tuned how these indicators
are used in their trading strategies over many years. We invite you to learn more about our traders,
courses, and trading rooms. We think trading mentorship, transparent information sharing, and hands-on
experience are the best ways to master the day trading craft.

Indicators & Day Trading

Some say that choosing indicators for day trading is more critical than for other types of trading. Prices
can pivot in a moment in volatile markets. A day trader can barely grab a coffee refill somedays!

By definition, indicators make patterns more noticeable, and when quick decision making is important, a
good indicator can make the difference in your trade. Most indicators for swing trading can be adapted
for day trading, and it’s likely that the base setup for each style will look similar. But, you’ll be best served
by tools or settings that provide easy visual cues and definitive signaling for opportunities intraday.

Trading platforms include many indicators for free and are compatible with premium indicators that can
be installed and configured. We’ll talk about a couple of the platforms we use at the end of this ebook.
You’ll want to try different indicators and settings within your chosen platform to see which ones work
best for you.

Our team likes to balance input from all four indicator categories:

VOLATILITY MOMENTUM

VOLUME TREND

...and this guide will touch on all of them.

Page | 2
A Word About
Moving Averages

Analyzing price is at the core of trading

decision making, and moving averages are
some of the most common indicators.

A moving average of price refers to the

changes in a security’s price over a set time
period, such as the past 20 days. On its
own, a moving average of historical prices
can be valuable for spotting momentum or
trend direction.

The most common moving averages

include simple moving average (SMA) and
exponential moving average (EMA).

SMA’s are the easiest to calculate. They are

the average pricing (usually closing price)
over the number of days.

EMA’s place greater weight on the most

recent pricing and can signal a change in
momentum or trend even sooner.

SMA’s and EMA’s are important

fundamental elements of many popular
indicators.

Now let’s talk about our favorite

indicators!

Page | 3
Our Top Picks - The Squeeze & Squeeze Pro
The Squeeze is probably the most popular free indicator in trading, including day trading. It was
developed by Simpler Trading’s Founder, John Carter, almost 20 years ago. It became famous worldwide
after John made his first $1M trade using the Squeeze with TSLA in 2014.

The Squeeze is a volatility indicator. What makes it special is that it helps identify the “calm before the
storm” that tends to occur before a big move. This allowed John to spot the opportunity in TSLA right
before that million dollar move that occured within just 24 hours. Without the Squeeze, it’s likely John
could have missed that historic trade.

The Squeeze actually has three different indicators working in the background to bring the Squeeze
magic to life - each one offers different insights about what price is doing:

Bollinger Bands Keltner Channels Momentum Oscillator

Measures the Measures the Shows the
standard deviation of average true range of momentum strength
price over time price over time over time

John and the team love that the Squeeze signals are color coded - they’re objective and easy to see which
makes it possible to react quickly and confidently. Here’s a breakdown of the colors for the free version
on the Squeeze:

• Red dots = compression (or energy) is building...the Squeeze is forming

• Green dots = when there isn’t a Squeeze, or when its firing

The Squeeze indicator includes a histogram that shows the direction of momentum.

Page | 4
How does this all work together?

• The dots on the zero line (i.e., the Squeeze) are directionless. They just tell you that a potentially
explosive move in price is coming.

• The histogram shows the current directional movement in price. The position of the bars above or
below the line indicate if you want to look for long or short trades. For example:

* If the bars are below the zero line, you may consider shorting the asset

* If the bars are above the zero line, you may consider going long in the asset

* If the angle of the momentum is returning to the zero line, then there may be a pause or
reversal in direction of price.

The Squeeze

Squeeze Pro, the premium version of the Squeeze, improves upon the original, free indicator because
it’s designed to catch more opportunities by identifying three Squeeze “strengths”. These include the
original Squeeze and two more to catch faster and more powerful moves.

Page | 5
The red and green dots are the same as in the free
Squeeze indicator.

Squeeze Pro adds black dots to show a weaker or

lower compression and orange dots for tighter
compression. The black dots tend to precede
faster moves that the original indicator would
miss. And the orange dots identify when to expect
an extraordinary strength Squeeze.
John Carter
The three Squeeze strengths in the Pro version Founder of Simpler Trading®
are designed to provide even greater sensitivity
The Squeeze is John Carter’s favorite
in compression measurement and the power to
indicator. He’s used the Squeeze strategy for
identify trading opportunities that the free tool
every million dollar trade he’s made - and
does not show!
there have been eight more of them since
Check out the chart below with the Squeeze free that first one in 2014!
indicator on top and Squeeze Pro on bottom.
You can clearly see that the Pro identifies more
potential trades.

Squeeze Pro

Page | 6
Our Favorite Free Day Trading Indicators
Free indicators are commonly used and available through most platforms. However, the Simpler Trading
team has several free indicators that they wouldn’t trade without. We hope that these can help you too!

Ichimoku Cloud
The Ichimoku Cloud (or just “the Cloud”) is a powerful indicator because it has five different calculations
rolled into one.

Four of the calculations are based on a collection of averages over different periods:

• 9 periods

• 26 periods

• The average of the 9 and 26 periods

• 52 periods

What’s unique about the Cloud is that its averages are based on price highs and lows, not on closing
prices like most moving averages. The averages in the Cloud calculation are charted onto four lines, with
a fifth line added for the lagging closing price. This might seem like a minor difference, but in practice it
gives traders extremely valuable information.

A physical cloud also appears on a Cloud graph - the borders formed from two of the charted averages.
Here’s a few things to remember about the physical cloud:

• Price relative to the physical cloud location

signals the trend

• If the direction of the physical cloud is moving

with the price, this indicates a stronger trend

• When price is above this physical cloud, it’s

bullish - expected to go up

• When price is below the physical cloud, it’s Chandler Horton

bearish - expected to go down Director of Day Trading Strategies

Chandler Horton loves the Cloud and it has

So, the Cloud indicator shows you the current and
been one of the most reliable and powerful
projected state of prices. All of this information
indicators over the course of his career. He
can be observed at a glance, and that makes this
relies on the Cloud for most of his trades!
indicator popular!

Page | 7
 Ichimoku Cloud

Keltner Channels
The Keltner Channels is an indicator that helps reveal both trends and volatility.

It charts three lines:

• An upper band

• A moving average (middle)

• And a lower band

The upper and lower bands are based on the

average true range (ATR), which is the average
range between the highest and lowest price in a Jack Roberts
single bar. The line in the middle is the EMA over 20 Director of Options Strategies &
days (or whatever period you choose). Micro-Futures

In volatile conditions, or just times when the trend Jack Roberts uses the Keltner Channels in a

is strong, the price will break through the upper or unique way. While most traders exit at the

lower channels. For example, when a stock breaks extremes, Jack likes to use the higher and

through the upper channels and the channels head lower ATR’s to enter the trade in the opposite

higher, it shows a strong upward trend. direction. For example, he buys at the -3
ATR, as that shows selling is exhausted.

Page | 8
Observing ATR through the Keltner Channels indicator helps traders make
entry and exit decisions. Here are some ways you can interpret the charts:

• When you see prices jump between the upper and lower bands of
the Keltner channels, it may signal potential exit points.

• When a stock reaches the upper band, you may want to wait to
enter a trade until the stock pulls back to the moving average.

• If you’re already in a trade and the stock reaches the upper band,
it might be an indication that you should exit or scale out of the
trade.

The upper and lower bands give you strong visual cues that are
especially helpful in decision making. You can quickly see when the
trend is likely to be in your favor, or when the timing is not right.
If a trade is stuck at an ATR level, it’s a good sign to take the profit and
move on.

Keltner Channels

Page | 9
AwesomeOscillator
AwesomeOscillator is a momentum indicator that uses moving averages plotted on histograms. It’s
awesome because it’s so visual in nature and relatively easy to use.

AwesomeOscillator compares the price movements in previous periods to the current price action; this is
done to demonstrate a change in momentum and a possible signal to enter or exit a trade.

How does it work?

• The price movement measurement is calculated by taking the 34 period SMA from the 5 period SMA
(calculated using the midpoint price, not closing price).

• The output is reflected on a histogram with each bar color coded red or green to indicate an increase
or decrease over the previous bar.

• This histogram fluctuates over the zero line.

• When the indicator is above the zero line, it

signals that the nearest term average pricing
(the 5 period SMA) is greater than the past
average pricing (the 34 period SMA).

• When the indicator crosses below the zero

line, the opposite is true. Allison Ostrander
Director of Risk Tolerance

This indicator can really help you visually identify
the direction of the trend. For example, if you’re
long in a stock and the oscillator is trending
below 0, then you're on the wrong side of the
trade and should get out.
For Allison Ostrander’s best trades, she
waits for the AwesomeOscillator to print a
bearish or bullish signal (depending which
side of the trade she’s on). It gives her
some extra confirmation!

How’s that for quick decision making?

AwesomeOscillator

Page | 10
Volume
Trading volume is a fundamental indicator
on it’s own, in addition to being the basis for
more complex indicators.

A security’s trading volume measures the

amount of shares that change hands. The
average volume will provide the average
number of shares in a given period.
You can look at a security’s trading volume
to assess if that security is drawing interest
(positively or negatively) from the market.
You can especially rely on average volume to
highlight opportunities for quick entry and
exit - the higher the volume, the better the
chance to get in and out of a trade quickly.
If you compare daily volume to the average
volume you can see relative interest, and
momentum, in either direction, signaling the
speed at which your trade should occur.
Joe Rokop
Managing Director of
Commodities & Equities
Joe Rokop started his career on the
trading floor and knows first-hand how
changes in volume can require quick
decision-making. He watches volume
specifically to know when big money is
purchasing and when they’re not. That
is one of his secrets to staying him on
the right side of the market!

Volume

Page | 11
Popular Premium Indicators
Free indicators can be a great place for any trader to start. But you
may want to graduate to using at least one premium indicator as
your skills, and needs, evolve.

Premium indicators can provide an extra edge, with

better design and slightly faster signals, that more
experienced traders seek. These are just a handful of
our favorite premium Simpler Trading indicators to use
for day trading.

10X Bars
Also developed by John Carter, the 10X Bars is designed to
reveal trend quality and strength. John uses the 10X Bars
to know when a move has “conviction” because that helps
him identify the biggest moves (or stay out when there is
“no conviction”).

The 10X Bars incorporates the Average Directional Movement Index (ADX) and Directional Movement
Index (DMI), which work together to show the volume and direction of average price range values.

ADX and DMI can be used separately as free

indicators, but the output is much more complex
- you’re left to interpret trendline slopes and the
positive and negative DMI lines on your own. 10X
Bars puts it all together for you in one easy-to-
read chart.

The indicator plots green, yellow, or red bars

to show upside, neutral, or downside trends
respectively. If there is a dot on the bar, volume
is 30% above average on that timeframe. This Jack Roberts
reveals when that trend, positive or negative, has Director of Options Strategies &
conviction. Micro-Futures

When Jack Roberts uses 10X Bars, he pays

You can use the 10X Bars indicator with any
the most attention to the volume dots - he
length of time. It can give you minute-to-minute
knows then that when the masses are on his
changes in trend, offering easy-to-read signals for
side, there's a good chance he’ll get a larger-
your quick day trading decisions.
than-expected move in the stock.

Page | 12
 10X Bars

Voodoo Lines
Voodoo Lines are predictive support and resistance levels that plot out into the future. They were
developed by Simpler Trading’s VP of Quantitative Analysis, David Starr.

The Voodoo Lines indicator is designed to help you make more precise trade entries and exits
by revealing where the market is likely to turn. They earned their “Voodoo” nickname when John
observed that price seems to be attracted to
these lines like “magic”.

The Voodoo Lines calculations are based on

Fibonacci analysis and Elliott Waves, two of the
more complex indicators in technical analysis.

• Fibonacci involves natural number sequences

that constantly occur throughout nature and
also in the market. Fibonacci tools can be
used to find support and resistance, as well as
John Carter
Founder of Simpler Trading®
identify potential zones to buy and sell.
John Carter uses Voodoo Lines because
• Elliott Waves is a predictive theory of how both
of their uncanny ability to reveal hidden
stock prices and human buying and selling
support and resistance levels that other
behavior form recurring five wave patterns in
traders can’t see. If the choice is between
the market. Skilled Elliott Wave practitioners
knowing where those levels are or not, then
have used these patterns to predict stock
there's really no choice at all!
pricing for decades.

Page | 13
If you’ve been looking to use Fibonacci or Elliott Waves in your trading, using Voodoo Lines can offer a
more approachable way to incorporate these techniques into your trading strategy.

You can monitor price movement between the Voodoo Lines that appear on your chart. Here’s how you
can use them:

• The most important line is the Fire line (red) - approaching this line indicates a price action change.

• If price drops to the red line, there is a good chance it’ll go up from there.

• If price drops below the red line, then we could see more selling towards the lower Voodoo Line.

The objective support and resistance levels make this indicator popular for almost every timeframe, but
even more so in day trading.

VWAP Max

VWAP Max
VWAP, which stands for volume weighted average price, is the free version of the indicator, and VWAP
Max is the premium option.

VWAP Max provides an advantage over regular moving averages for decisions. It shows the average price
at which a security has sold throughout the day, factoring in volume.

How can adding volume to average pricing help you? Volume helps to show the strength of a move more
precisely. So, periods of high price action and trading volume are reflected in larger fluctuations in the
VWAP.

Page | 14
Also, because the indicator pulls from
multiple relative time periods, not closing
values, it shows you a truer picture of how
price and volume fluctuate together.

And the VWAP Max premium indicator

gives you even more.

• Traders can anchor the VWAP to Raghee Horner

specific moments in time so that it
begins collecting data at the beginning
of whichever period you’d prefer. The
regular VWAP anchors to the Globex
Open, but the Max allows you to anchor
to the U.S. Open, European Open, and
more. Together, these features give
you greater sensitivity for the time and
markets you prefer that day.
Managing Director of Futures Trading®
Raghee Horner developed this indicator to help
her identify what the “big money” is doing. Some
components of VWAP MAX are available in other
indicators, but she saw an opportunity to uniquely
combine this analysis to create something even
better. It’s a perfect match for her trading style!

• VWAP Max also displays an envelope

around the VWAP that shows traders the theoretical maximum distance from the VWAP. This gives
you an idea of when a return to the VWAP is likely - a good edge in your entry and exit strategy.

Page | 15
Next Steps
Setting Up Indicators
Indicators have to be compatible with your trading platform. Once you choose a free or premium
indicator to use, double check that your current platform can accommodate your choice. If you’re looking
for a change, we have a couple of suggestions.

At Simpler Trading, we frequently recommend TD Ameritrade and their charting program Think or Swim
(TOS). If you choose to become a member at Simpler Trading, our customer service team can provide
guidance on general installation and indicator installations with TOS.

The platform tastyworks is also very popular among our traders. Our customer service team is ready to
assist with all tastyworks installations too!

See Day Trading Indicators in Action

Are you ready to put your new day trading indicators to the test? Watch professional traders execute live
trades using the signals from these indicators, in the Simpler Day Trading room. Learn strategies, ask
questions and up your day trading game!

Get a 7-day trial for only $7 and experience day trading in real-time with real professionals. We look
forward to seeing you there!

Have Questions?
Visit us online or email us at Support@SimplerTrading.com.

Page | 16