Intraday Intensity Index for ThinkorSwim

intraday intensity indicator

Stop-loss levels can be set above and below the VWAP, with the following support and resistance levels serving as targets. Typically, 9-period and 26-period EMAs are used in the EMA cross for intraday trading. With thousands of topics, tens of thousands of posts, our community has created an incredibly deep knowledge base for stock traders. When the Aroon-up line touches 100 while the Aroon-down line is near zero and stays in the same position for some time, you are likely to witness an uptrend. But keep in mind that anything smaller than this will make the indicator pick more signals and noise. This is a mean reversion strategy based on Bollinger Bands and the Intraday Intensity Index (a volume indicator)….

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Using the same concept, open a buy position when the price touches the lower Bollinger and the intraday intensity is showing an oversold signal. The Intraday Intensity Index is a valuable technical indicator that integrates volume and price data to help traders gauge the buying and selling pressure in a security’s price movements. While the III has limitations, traders can combine it with other technical indicators to develop more comprehensive trading strategies. As with any trading tool, traders should consider the III as part of a broader analytical framework and exercise caution when interpreting signals to make informed trading decisions. The Intraday Intensity Index is a volume-based technical indicator that integrates volume with a security’s price.

Sell Signal

This is a mean reversion strategy based on Bollinger Bands and the Intraday Intensity Index . John Bollinger mentions that the Intraday Intensity Index can be used with Bollinger Bands and is one of the top indicators he recommends in his book. It seems he prefers it over the other volume indicators that he compares to for some reason. III looks a lot like Chaikin Money Flow but without the denominator in that calculation. While these signals aren’t always accurate, they may provide a greater degree of accuracy than simply using the RSI. Many traders combine these insights with other forms of technical analysis to maximize their chances of a successful trade.

  • This price is known as the net asset value (NAV) and reflects all of the intraday movement of the fund’s assets, less its liabilities, calculated on a per-share basis.
  • The moving averages can be of different periods such as 5, 10, 20, 50, 100 period MAs.
  • However, Supertrend may sometimes generate false signals in the ‘sideways’ market.
  • In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading.

Traders can use The IIP to gauge the overall market sentiment during a specific period. A positive IIP value indicates that buying pressure dominates the market, while a negative value signals selling pressure. Monitoring the IIP can help traders identify shifts in sentiment and potential trend reversals.

Example Using the Intraday Momentum Index

Traders can combine the III with the RSI or other momentum indicators to identify overbought or oversold conditions, which may signal a potential trend reversal. Below we discuss why the most accurate intraday strategy indicators are in demand. A moving average is a technical analysis indicator intraday intensity indicator that helps level price action by filtering out the noise from random price fluctuations. The numerator subtracts the security’s high and low from two times the most recent closing price. The denominator multiples volume times the difference between the security’s high and low trading price.

  • The IIP can help investors and traders identify potential reversals and confirm the strength of price trends.
  • John Bollinger mentions that the Intraday Intensity Index can be used with Bollinger Bands and is one of the top indicators he recommends in his book.
  • The Intraday Intensity Index provides traders with a way to identify trends and momentum in the forex market, which can be used to make informed trading decisions.
  • Generally, in the index’s calculation, when the intraday highs and lows move above the closing price with volume, then the index will move sharply toward negative territory.
  • The Intraday Intensity Indicator is typically calculated by multiplying the volume of each price change by a factor that depends on the price direction.
  • Intraday price movements are particularly significant to short-term or day traders looking to make multiple trades over the course of a single trading session.

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Intraday Intensity Index

The idea behind Intraday Intensity is that the need for institutional traders to complete their positions gets ever more urgent as the close of trading looms. As they move to fill their needs late in the day their actions cause prices to rise or fall, effectively tipping their hands via the relationship of the close to the day’s range. If the price of a security rises and the IIP is consistently positive, it suggests that the uptrend is supported by intense buying pressure. Conversely, a falling price accompanied by a consistently negative IIP indicates that the downtrend is driven by selling pressure.

intraday intensity indicator

By integrating multiple indicators, traders can confirm signals, identify potential entry and exit points, and make more informed trading decisions. It combines both price and volume data to assess the buying and selling pressure within a given trading session. It is important to note that the Intraday Intensity Indicator should not be used in isolation but rather in conjunction with other technical analysis tools and indicators. The Intraday Intensity Indicator offers traders valuable insights into market dynamics. High values of the indicator indicate strong buying pressure, suggesting a potential bullish trend or upward momentum. Conversely, low values suggest strong selling pressure, indicating a bearish trend or downward momentum.

Trend Power and Direction Indicator for MT5

Traders should refer to the specific documentation or user guides provided by their chosen platform to ensure they are using the correct calculation method. The Intraday Intensity Indicator provides a single value that reflects the overall intensity or strength of the price movement during the specified timeframe. This value can be plotted on a chart to observe the trend and generate trading signals.

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The Simple Moving Average (SMA) is a widely-used directional indicator that helps traders identify the overall trend direction. By combining the III with the SMA, traders can assess whether the buying or selling pressure aligns with the general trend. For instance, if the III is consistently above the SMA, it may indicate intense buying pressure during an uptrend, signaling a potential trading opportunity. Traders use the III to understand the balance between buying and selling pressure, which can help them make informed decisions about entering or exiting trades. The index aims to reveal whether a security’s price is being pushed up or down by the market’s trading volume. Like any technical analysis tool, the Intraday Intensity Indicator has limitations.

Anchored Volatility Stop

In the EUR/USD chart above, we can see how the price hits the upper band of Bollinger Bands before falling significantly. It also happens that the price action indicates a bearish engulfing pattern, which is a pretty strong bearish reversal signal. The short opportunity is further supported by the preceding signal from a bearish divergence between the price and intraday intensity indicator.

intraday intensity indicator

It is primarily focused on intraday trading and may not be as effective in longer-term trading strategies. Additionally, it should be used in conjunction with other indicators and analysis techniques for better accuracy. Traders should use proper risk management techniques to reduce the risk of false signals and to generate potential trades. Hypothetical performance results have many inherent limitations, some of which are described below.