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 & how do they work?

Indicators are tools that traders use to develop strategies; they do not create trading signals on their own. Any ambiguity can lead to trouble (in the form of trading losses). The type of indicator a trader uses to develop a strategy depends on what type of strategy the individual plans on building.

What is a price indicator & how does it work?

This indicator calculates the cumulative sum of up days and down days over the window period and calculates a value that can range from zero to 100. If all of the price action is to the upside, the indicator will approach 100; if all of the price action is to the downside, then the indicator will approach zero.