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 :
Exponential Moving Average
Moving Average Convergence Divergence (MACD)
Relative Strength Index (RSI)
Percentage Price Oscillator (PPO)
Average directional index
Williams Percent Range (%R)
Commodity Channel Index (CCI)
On-Balance volume (OBV)
Indicators drawn on top of existing chart are called Overlays and one’s drawn separately are oscillators.