Индикаторы Take Profit

индикаторы take profit

One of the greatest misunderstandings in retail trading is the (mis)interpretation and the (ab)use of indicators.

Today we want to do away with the mystification and misunderstandings around indicators and we will provide a new and different way of looking at trading with indicators. Hopefully, we can help stop the madness that is going on between price action and indicator supporters.

Indicators don’t provide signals

The first point is also the most important one and it is the main reason why so many traders never seem to have success using indicators. It can be hard to wrap your head around it because not many, if any, trading websites really talk about this problem and it is probably the complete opposite to what you have been taught so far; but maybe that’s the reason why so many traders struggle!?

indicators work

Indicators don’t provide signals. They don’t tell you when to buy or when to sell. They don’t even tell you when something is overbought or oversold.

Indicators provide information ONLY

This is what indicators really do, and it’s their one and only purpose. Indicators provide information about price, how price has moved, how candles have shaped and how recent price action compares to historical price action.

The very nature of indicators is to use the price information you see on your charts – typically the high, low, open and close of candlesticks –then apply a formula to it and turn it into visual information.

Thus, the job of a trader is to interpret the information on their indicators in a meaningful way and turn it into a story about price action.

And here lies the problem. Most traders never look at the indicators they are using and even less have ever tried to understand the formula the indicator uses to analyze price. They then use their indicators in the wrong context and wonder why nothing works.

As a professional, you need a thirst for information. Do your own research and get to know your tools.

I call this surface–level technical analysis.

If all you are doing is to look for a cross on the Stochastic, if you only wait for an indicator to go into the overbought/oversold area, or if you just wait for a cross-over on your MACD as a signal, indicators will not work for you and maybe trading is not the right thing. You cannot reduce price action and making trading decisions to just that.

Indicators are tools you use to analyze price information and they, as the name suggests, indicate certain aspects about a chart situation.

Trading is about connecting the dots

Just hunting for signals lead to bad trading.

If you want to identify potential, high probability trade scenarios, you must learn to listen to what the price charts tell you.

Who is in control right now? Are buyers or sellers pushing price up stronger? How do trend waves relate to each other? Is momentum gaining or losing strength? How is the price reacting around previous highs and lows and how does price push into levels and highs?

Those are all important clues that will help you understand the buyer and the seller dynamic.

And indicators can be used in a similar way:

A divergence on your RSI, for example, just tells you that the most recent price move was not as strong as the previous one, but it’s not a signal to go short immediately. A bearish engulfing pattern just tells you that there was more bearish activity than previously, but it’s not an automatic sell signal; a head and shoulders pattern just shows you that the magnitude of highs and lows has changed and that buyers weren’t able to push price to new highs, but it does not mean that you have to short each head and shoulders pattern you come across. Context and confluence is what matters.

The purpose of each trading style, method and approach is just to offer a way to identify clues and to provide a framework for traders to work in. Collecting clues, combining them in meaningful ways and then building sophisticated trading decisions is what it’s all about. Hunting signals is not what trading should be.

Indicators tell you immediately what is going on

Indicators are great tools if a trader understands their true purpose. Of course, you can just look at price action and get an idea for momentum or volatility, but indicators take out the guesswork and make information processing much faster and easier.

There is also little room for misinterpretations and subjectivity when using indicators. You might wonder how strong a trend is and if volatility is really increasing, but taking a look at your RSI or looking at the Bollinger Bands immediately tells you what price is doing.

Again, it comes down to interpreting the information indicators provide. Indicators transform price data into visual information. Not having to think about price action in the middle of a trade when making important decisions, can be of great value which leads us to the next point…

Indicators are ideal for rule-based trading

Indicators take out the guesswork by providing information that is totally objective. Especially new traders or traders who are struggling with discipline can benefit from that.

If you are a trend trader, for example, you can use indicators as filters. You might have a rule that says that you can only look for long trading opportunities on the lower timeframe when price on the higher timeframe is above a certain moving average and when the RSI is rising, or when the Stochastics are pointing upwards. Using higher timeframe filters by using indicator based rules often work wonders for new traders.

Of course, there are many other possible use cases but the idea is always the same: pick an indicator that supports your trading style and your objectives, then use it as a filter and wait for additional criteria.

“I review my checklist. It’s a handwritten sheet laminated in plastic and taped to the right-hand corner of my desk where I can’t overlook it.” – Marty Schwartz

Why do indicators lag? Why do they always show important things when it is too late?

It is true, indicators are lagging – but so is price action. An indicator can only analyze what has happened already. Just as a candlestick pattern or a chart formation only includes past price data.

Indicators and price action is essentially the same thing.

However, as we have said many times: indicators only provide information and do not offer signals. Thus, use the indicator information, combine it with what you see on your charts and then form a sophisticated trade idea.

Secondly, adjust the parameters of your indicator. The lack of common sense is often surprising. If you are a day trader and need to react fast to changing price and market conditions, is it really helpful to use a period indicator setting? And wouldn’t it make more sense to use an exponential moving average that shifts faster when something happens?

Conclusion: The true meaning of indicators

Always be aware of the objectives of your trading style and what you are trying to accomplish with the indicators. Then, adjust accordingly. With the tips in this article and the new way of looking at indicators, it should become obvious that indicators are not better or worse than price action trading – it’s the same. Once a trader can stop using indicators as signal-tools, he will be able to transform his trading to new heights.

image credit: eunic-brussels.eu

Indicators

Agriculture & Rural Development

Aid Effectiveness

Grants, excluding technical cooperation (BoP, current US$)
Incidence of tuberculosis (per , people)
Income share held by lowest 20%
Maternal mortality ratio (modeled estimate, per , live births)
Mortality rate, under-5 (per 1, live births)
Net ODA received (% of GNI)
Net ODA received (% of central government expense)
Net ODA received (% of gross capital formation)
Net ODA received (% of imports of goods, services and primary income)
Net ODA received per capita (current US$)
Net migration
Net official development assistance received (current US$)
Poverty headcount ratio at $ a day ( PPP) (% of population)
Pregnant women receiving prenatal care (%)
Prevalence of HIV, total (% of population ages )
Prevalence of stunting, height for age (% of children under 5)
Primary completion rate, total (% of relevant age group)
School enrollment, primary and secondary (gross), gender parity index (GPI)
Technical cooperation grants (BoP, current US$)

Climate Change

Access to electricity (% of population)
Agricultural irrigated land (% of total agricultural land)
Agricultural land (% of land area)
Agriculture, forestry, and fishing, value added (% of GDP)
Annual freshwater withdrawals, total (% of internal resources)
Annual freshwater withdrawals, total (billion cubic meters)
Arable land (% of land area)
CO2 emissions (kt)
CO2 emissions (metric tons per capita)
CPIA public sector management and institutions cluster average (1=low to 6=high)
Cereal yield (kg per hectare)
Ease of doing business rank (1=most business-friendly regulations)
Electric power consumption (kWh per capita)
Energy use (kg of oil equivalent per capita)
Forest area (% of land area)
Forest area (sq. km)
Land area where elevation is below 5 meters (% of total land area)
Methane emissions (kt of CO2 equivalent)
Mortality rate, under-5 (per 1, live births)
Nitrous oxide emissions (thousand metric tons of CO2 equivalent)
Population growth (annual %)
Population in urban agglomerations of more than 1 million (% of total population)
Population living in areas where elevation is below 5 meters (% of total population)
Population, total
Poverty headcount ratio at $ a day ( PPP) (% of population)
Prevalence of underweight, weight for age (% of children under 5)
Primary completion rate, total (% of relevant age group)
Renewable electricity output (% of total electricity output)
Renewable energy consumption (% of total final energy consumption)
School enrollment, primary and secondary (gross), gender parity index (GPI)
Terrestrial and marine protected areas (% of total territorial area)
Total greenhouse gas emissions (kt of CO2 equivalent)
Urban population
Urban population (% of total population)

Economy & Growth

Adjusted net savings, including particulate emission damage (% of GNI)
Agriculture, forestry, and fishing, value added (% of GDP)
Central government debt, total (% of GDP)
Charges for the use of intellectual property, payments (BoP, current US$)
Charges for the use of intellectual property, receipts (BoP, current US$)
Current account balance (BoP, current US$)
Expense (% of GDP)
Exports of goods and services (% of GDP)
External debt stocks (% of GNI)
External debt stocks, total (DOD, current US$)
Foreign direct investment, net inflows (BoP, current US$)
GDP (current US$)
GDP growth (annual %)
GDP per capita (current US$)
GDP per capita growth (annual %)
GDP per capita, PPP (current international $)
GNI per capita, Atlas method (current US$)
GNI per capita, PPP (current international $)
GNI, Atlas method (current US$)
GNI, PPP (current international $)
Grants, excluding technical cooperation (BoP, current US$)
Gross capital formation (% of GDP)
Gross savings (% of GDP)
Imports of goods and services (% of GDP)
Industry (including construction), value added (% of GDP)
Inflation, GDP deflator (annual %)
Inflation, consumer prices (annual %)
Medium and high-tech manufacturing value added (% manufacturing value added)
Net ODA received (% of GNI)
Net ODA received per capita (current US$)
Net official development assistance received (current US$)
PPP conversion factor, GDP (LCU per international $)
Personal remittances, received (current US$)
Price level ratio of PPP conversion factor (GDP) to market exchange rate
Revenue, excluding grants (% of GDP)
Short-term debt (% of total reserves)
Technical cooperation grants (BoP, current US$)
Total debt service (% of exports of goods, services and primary income)
Total reserves (includes gold, current US$)

Education

Children out of school, primary, female
Children out of school, primary, male
Government expenditure on education, total (% of GDP)
Government expenditure on education, total (% of government expenditure)
Government expenditure per student, primary (% of GDP per capita)
Government expenditure per student, secondary (% of GDP per capita)
Government expenditure per student, tertiary (% of GDP per capita)
Gross intake ratio in first grade of primary education, female (% of relevant age group)
Gross intake ratio in first grade of primary education, male (% of relevant age group)
Labor force, female (% of total labor force)
Labor force, total
Literacy rate, adult female (% of females ages 15 and above)
Literacy rate, adult male (% of males ages 15 and above)
Literacy rate, adult total (% of people ages 15 and above)
Literacy rate, youth female (% of females ages )
Literacy rate, youth male (% of males ages )
Literacy rate, youth total (% of people ages )
Persistence to last grade of primary, female (% of cohort)
Persistence to last grade of primary, male (% of cohort)
Population ages (% of total population)
Population ages (% of total population)
Primary completion rate, female (% of relevant age group)
Primary completion rate, male (% of relevant age group)
Primary completion rate, total (% of relevant age group)
Progression to secondary school, female (%)
Progression to secondary school, male (%)
Pupil-teacher ratio, primary
Repeaters, primary, female (% of female enrollment)
Repeaters, primary, male (% of male enrollment)
School enrollment, preprimary (% gross)
School enrollment, primary (% gross)
School enrollment, primary (% net)
School enrollment, primary (gross), gender parity index (GPI)
School enrollment, primary and secondary (gross), gender parity index (GPI)
School enrollment, secondary (% gross)
School enrollment, secondary (% net)
School enrollment, tertiary (% gross)
Trained teachers in primary education (% of total teachers)
Unemployment, female (% of female labor force) (modeled ILO estimate)
Unemployment, male (% of male labor force) (modeled ILO estimate)
Unemployment, total (% of total labor force) (modeled ILO estimate)

Energy & Mining

Environment

Access to electricity (% of population)
Adjusted net savings, including particulate emission damage (% of GNI)
Agricultural land (% of land area)
Annual freshwater withdrawals, total (% of internal resources)
Annual freshwater withdrawals, total (billion cubic meters)
Arable land (% of land area)
Bird species, threatened
CO2 emissions (kt)
CO2 emissions (metric tons per capita)
Energy intensity level of primary energy (MJ/$ PPP GDP)
Fish species, threatened
Forest area (% of land area)
Forest area (sq. km)
Land area (sq. km)
Land area where elevation is below 5 meters (% of total land area)
Mammal species, threatened
Methane emissions (kt of CO2 equivalent)
Nitrous oxide emissions (thousand metric tons of CO2 equivalent)
PM air pollution, mean annual exposure (micrograms per cubic meter)
PM air pollution, population exposed to levels exceeding WHO guideline value (% of total)
Plant species (higher), threatened
Population living in areas where elevation is below 5 meters (% of total population)
Population living in slums (% of urban population)
Renewable electricity output (% of total electricity output)
Renewable energy consumption (% of total final energy consumption)
Renewable internal freshwater resources per capita (cubic meters)
Renewable internal freshwater resources, total (billion cubic meters)
Surface area (sq. km)
Terrestrial and marine protected areas (% of total territorial area)
Total greenhouse gas emissions (kt of CO2 equivalent)
Total natural resources rents (% of GDP)

External Debt

Current account balance (BoP, current US$)
External debt stocks (% of GNI)
External debt stocks, private nonguaranteed (PNG) (DOD, current US$)
External debt stocks, public and publicly guaranteed (PPG) (DOD, current US$)
External debt stocks, short-term (DOD, current US$)
External debt stocks, total (DOD, current US$)
Foreign direct investment, net inflows (BoP, current US$)
Grants, excluding technical cooperation (BoP, current US$)
IBRD loans and IDA credits (DOD, current US$)
Net ODA received (% of GNI)
Net ODA received per capita (current US$)
Net official development assistance received (current US$)
Personal remittances, received (current US$)
Short-term debt (% of total reserves)
Technical cooperation grants (BoP, current US$)
Total debt service (% of exports of goods, services and primary income)
Total reserves (includes gold, current US$)
Use of IMF credit (DOD, current US$)

Financial Sector

Automated teller machines (ATMs) (per , adults)
Bank capital to assets ratio (%)
Bank nonperforming loans to total gross loans (%)
Broad money (% of GDP)
Broad money growth (annual %)
Commercial bank branches (per , adults)
Deposit interest rate (%)
Depth of credit information index (0=low to 8=high)
Domestic credit provided by financial sector (% of GDP)
Domestic credit to private sector (% of GDP)
Foreign direct investment, net inflows (BoP, current US$)
Inflation, consumer prices (annual %)
Interest rate spread (lending rate minus deposit rate, %)
International migrant stock, total
Lending interest rate (%)
Listed domestic companies, total
Market capitalization of listed domestic companies (% of GDP)
Market capitalization of listed domestic companies (current US$)
Net migration
Official exchange rate (LCU per US$, period average)
Personal remittances, received (current US$)
Real interest rate (%)
Risk premium on lending (lending rate minus treasury bill rate, %)
S&P Global Equity Indices (annual % change)
Stocks traded, total value (% of GDP)
Stocks traded, turnover ratio of domestic shares (%)
Strength of legal rights index (0=weak to 12=strong)
Total reserves (includes gold, current US$)

Gender

Adolescent fertility rate (births per 1, women ages )
Births attended by skilled health staff (% of total)
Children in employment, female (% of female children ages )
Children in employment, male (% of male children ages )
Children out of school, primary, female
Children out of school, primary, male
Contraceptive prevalence, any method (% of married women ages )
Contributing family workers, female (% of female employment) (modeled ILO estimate)
Contributing family workers, male (% of male employment) (modeled ILO estimate)
Employment in agriculture, female (% of female employment) (modeled ILO estimate)
Employment in agriculture, male (% of male employment) (modeled ILO estimate)
Employment in industry, female (% of female employment) (modeled ILO estimate)
Employment in industry, male (% of male employment) (modeled ILO estimate)
Employment in services, female (% of female employment) (modeled ILO estimate)
Employment in services, male (% of male employment) (modeled ILO estimate)
Fertility rate, total (births per woman)
Firms with female participation in ownership (% of firms)
Firms with female top manager (% of firms)
Gross intake ratio in first grade of primary education, female (% of relevant age group)
Gross intake ratio in first grade of primary education, male (% of relevant age group)
Labor force participation rate, female (% of female population ages 15+) (modeled ILO estimate)
Labor force participation rate, male (% of male population ages 15+) (modeled ILO estimate)
Labor force, female (% of total labor force)
Life expectancy at birth, female (years)
Life expectancy at birth, male (years)
Literacy rate, adult female (% of females ages 15 and above)
Literacy rate, adult male (% of males ages 15 and above)
Literacy rate, youth female (% of females ages )
Literacy rate, youth male (% of males ages )
Maternal mortality ratio (modeled estimate, per , live births)
Persistence to last grade of primary, female (% of cohort)
Persistence to last grade of primary, male (% of cohort)
Pregnant women receiving prenatal care (%)
Prevalence of HIV, female (% ages )
Prevalence of HIV, male (% ages )
Primary completion rate, female (% of relevant age group)
Primary completion rate, male (% of relevant age group)
Progression to secondary school, female (%)
Progression to secondary school, male (%)
Proportion of seats held by women in national parliaments (%)
Proportion of time spent on unpaid domestic and care work, female (% of 24 hour day)
Proportion of time spent on unpaid domestic and care work, male (% of 24 hour day)
Repeaters, primary, female (% of female enrollment)
Repeaters, primary, male (% of male enrollment)
School enrollment, primary (gross), gender parity index (GPI)
School enrollment, primary and secondary (gross), gender parity index (GPI)
Teenage mothers (% of women ages who have had children or are currently pregnant)
Unemployment, female (% of female labor force) (modeled ILO estimate)
Unemployment, male (% of male labor force) (modeled ILO estimate)
Unemployment, youth female (% of female labor force ages ) (modeled ILO estimate)
Unemployment, youth male (% of male labor force ages ) (modeled ILO estimate)
Vulnerable employment, female (% of female employment) (modeled ILO estimate)
Vulnerable employment, male (% of male employment) (modeled ILO estimate)
Wage and salaried workers, female (% of female employment) (modeled ILO estimate)
Wage and salaried workers, male (% of male employment) (modeled ILO estimate)
Women making their own informed decisions regarding sexual relations, contraceptive use and reproductive health care (% of women age )

Health

Adolescent fertility rate (births per 1, women ages )
Age dependency ratio (% of working-age population)
Birth rate, crude (per 1, people)
Births attended by skilled health staff (% of total)
Cause of death, by communicable diseases and maternal, prenatal and nutrition conditions (% of total)
Cause of death, by injury (% of total)
Cause of death, by non-communicable diseases (% of total)
Completeness of birth registration (%)
Completeness of death registration with cause-of-death information (%)
Contraceptive prevalence, any method (% of married women ages )
Death rate, crude (per 1, people)
Diabetes prevalence (% of population ages 20 to 79)
Fertility rate, total (births per woman)
Hospital beds (per 1, people)
Immunization, DPT (% of children ages months)
Immunization, measles (% of children ages months)
Incidence of tuberculosis (per , people)
International migrant stock, total
Life expectancy at birth, female (years)
Life expectancy at birth, male (years)
Life expectancy at birth, total (years)
Maternal mortality ratio (modeled estimate, per , live births)
Mortality caused by road traffic injury (per , population)
Mortality rate, infant (per 1, live births)
Mortality rate, neonatal (per 1, live births)
Mortality rate, under-5 (per 1, live births)
Net migration
Number of surgical procedures (per , population)
Population ages (% of total population)
Population ages (% of total population)
Population ages 65 and above (% of total population)
Population growth (annual %)
Population, female (% of total population)
Population, total
Pregnant women receiving prenatal care (%)
Prevalence of HIV, female (% ages )
Prevalence of HIV, male (% ages )
Prevalence of HIV, total (% of population ages )
Prevalence of anemia among children (% of children ages months)
Prevalence of overweight, weight for height (% of children under 5)
Prevalence of severe wasting, weight for height (% of children under 5)
Prevalence of stunting, height for age (% of children under 5)
Prevalence of undernourishment (% of population)
Prevalence of underweight, weight for age (% of children under 5)
Prevalence of wasting, weight for height (% of children under 5)
Refugee population by country or territory of asylum
Refugee population by country or territory of origin
Risk of catastrophic expenditure for surgical care (% of people at risk)
Risk of impoverishing expenditure for surgical care (% of people at risk)
Specialist surgical workforce (per , population)
Teenage mothers (% of women ages who have had children or are currently pregnant)
Unmet need for contraception (% of married women ages )

Infrastructure

Poverty

Private Sector

Public Sector

Science & Technology

Social Development

Adolescent fertility rate (births per 1, women ages )
Children in employment, female (% of female children ages )
Children in employment, male (% of male children ages )
Children in employment, total (% of children ages )
Labor force participation rate, female (% of female population ages 15+) (modeled ILO estimate)
Labor force participation rate, male (% of male population ages 15+) (modeled ILO estimate)
Life expectancy at birth, female (years)
Life expectancy at birth, male (years)
Prevalence of HIV, female (% ages )
Prevalence of HIV, male (% ages )
Proportion of seats held by women in national parliaments (%)
Refugee population by country or territory of asylum
Refugee population by country or territory of origin
School enrollment, primary (gross), gender parity index (GPI)
School enrollment, primary and secondary (gross), gender parity index (GPI)
Unemployment, female (% of female labor force) (modeled ILO estimate)
Unemployment, male (% of male labor force) (modeled ILO estimate)
Vulnerable employment, female (% of female employment) (modeled ILO estimate)
Vulnerable employment, male (% of male employment) (modeled ILO estimate)

Social Protection & Labor

Children in employment, female (% of female children ages )
Children in employment, male (% of male children ages )
Children in employment, total (% of children ages )
Contributing family workers, female (% of female employment) (modeled ILO estimate)
Contributing family workers, male (% of male employment) (modeled ILO estimate)
Employment in agriculture, female (% of female employment) (modeled ILO estimate)
Employment in agriculture, male (% of male employment) (modeled ILO estimate)
Employment in industry, female (% of female employment) (modeled ILO estimate)
Employment in industry, male (% of male employment) (modeled ILO estimate)
Employment in services, female (% of female employment) (modeled ILO estimate)
Employment in services, male (% of male employment) (modeled ILO estimate)
Employment to population ratio, 15+, total (%) (modeled ILO estimate)
GDP per person employed (constant PPP $)
Labor force participation rate, female (% of female population ages 15+) (modeled ILO estimate)
Labor force participation rate, male (% of male population ages 15+) (modeled ILO estimate)
Labor force, female (% of total labor force)
Labor force, total
Unemployment, female (% of female labor force) (modeled ILO estimate)
Unemployment, male (% of male labor force) (modeled ILO estimate)
Unemployment, total (% of total labor force) (modeled ILO estimate)
Unemployment, youth female (% of female labor force ages ) (modeled ILO estimate)
Unemployment, youth male (% of male labor force ages ) (modeled ILO estimate)
Vulnerable employment, female (% of female employment) (modeled ILO estimate)
Vulnerable employment, male (% of male employment) (modeled ILO estimate)
Wage and salaried workers, female (% of female employment) (modeled ILO estimate)
Wage and salaried workers, male (% of male employment) (modeled ILO estimate)

Trade

Urban Development

Technical Indicator: Definition, Analyst Uses, Types and Examples

What Is a Technical Indicator?

Technical indicators are heuristic or pattern-based signals produced by the price, volume, and/or open interest of a security or contract used by traders who follow technical analysis.

By analyzing historical data, technical analysts use indicators to predict future price movements. Examples of common technical indicators include the Relative Strength Index (RSI), Money Flow Index (MFI), stochastics, moving average convergence divergence (MACD), and Bollinger Bands®.

Key Takeaways

Technical indicators are heuristic or mathematical calculations based on the price, volume, or open interest of a security or contract used by traders who follow technical analysis.
Technical analysts or chartists look for technical indicators in historical asset price data to judge entry and exit points for trades.
There are several technical indicators that fall broadly into two main categories: overlays and oscillators.

How Technical Indicators Work

Technical analysis is a trading discipline employed to evaluate investments and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume. Unlike fundamental analysts, who attempt to evaluate a security’s intrinsic value based on financial or economic data, technical analysts focus on patterns of price movements, trading signals, and various other analytical charting tools to evaluate a security’s strength or weakness.

Technical analysis can be used on any security with historical trading data. This includes stocks, futures, commodities, fixed-income, currencies, and other securities. In this tutorial, we’ll usually analyze stocks in our examples, but keep in mind that these concepts can be applied to any type of security. In fact, technical analysis is far more prevalent in commodities and forex markets, where traders focus on short-term price movements.

Technical indicators, also known as “technicals,” are focused on historical trading data, such as price, volume, and open interest, rather than the fundamentals of a business, such as earnings, revenue, or profit margins. Technical indicators are commonly used by active traders, since they’re designed to analyze short-term price movements, but long-term investors may also use technical indicators to identify entry and exit points.

Types of Indicators

There are two basic types of technical indicators:

Overlays: Technical indicators that use the same scale as prices are plotted over the top of the prices on a stock chart. Examples include moving averages and Bollinger Bands®.
Oscillators: Technical indicators that oscillate between a local minimum and maximum are plotted above or below a price chart. Examples include the stochastic oscillator, MACD, or RSI.

Traders often use many different technical indicators when analyzing a security. With thousands of different options, traders must choose the indicators that work best for them and familiarize themselves with how they work. Traders may also combine technical indicators with more subjective forms of technical analysis, such as looking at chart patterns, to come up with trade ideas. Technical indicators can also be incorporated into automated trading systems, given their quantitative nature.

Example of Technical Indicators

The following chart shows some of the most common technical indicators, including moving averages, the RSI, and the MACD.

In this example, the and day moving averages are plotted over the top of the prices to show where the current price stands relative to its historical averages. The day moving averages is higher than the day moving average in this case, which suggests that the overall trend has been positive. The RSI above the chart shows the strength of the current trend—a neutral , in this case. The MACD below the chart shows how the two moving averages have converged or diverged—slightly bearish, in this case.

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