Traders use Trading Indicator as technical analysis tool on price charts to ascertain market conditions.
There are mainly two types of trading indicators
- Leading Indicator
- Lagging Indicator
When applied on a price chart of a security, Lagging indicators will analyse the past market condition and indicate momentum whereas Lagging Indicators will predict future price action of a security.
There are 100’s of trading indicators to choose from. Some of the very popular one’s are below :
Moving Average
Exponential Moving Average
Moving Average Convergence Divergence (MACD)
Relative Strength Index (RSI)
Percentage Price Oscillator (PPO)
Parabolic SAR
Average directional index
Stochastic oscillator
Standard deviation
Bollinger bands
Fibonacci retracement
Williams Percent Range (%R)
Commodity Channel Index (CCI)
Ichimoku cloud
On-Balance volume (OBV)
Accumulation/Distribution line
Aroon indicator
Indicators drawn on top of existing chart are called Overlays and one’s drawn separately are oscillators.