What are trading indicators?

Trading indicators are a key component of technical analysis, which involves studying historical price and volume data to identify patterns and make predictions about the direction of the market. These indicators are based on mathematical calculations that are derived from historical price, volume, or open interest data for a particular security.

What is the difference between market indicators and technical indicators?

Market indicators are similar to technical indicators in that both apply a statistical formula to a series of data points to draw a conclusion. The difference is that market indicators use data points from multiple securities rather than just a single security.

What are indicators and how do they work?

An indicator uses price data, mathematical formulas, graphs, and charts to create a visual signal for a trend in a market. Using indicators is called "technical analysis," because it uses technical instruments rather than fundamentals like balance sheet ratios.

What is a trending indicator & how does it work?

Indicators produce trading signals and each indicator does this differently depending on how the indicator calculates the price action to provide the signal. They fall into two further categories: The trend on a chart, as well as its strength, is not always obvious and a trending indicator can make this clearer.