Technical price indicators are a group of tools traders and investors use to analyze past price data and predict future price movements in financial markets. These indicators are mathematical calculations based on price and volume data, and they help traders make informed decisions about buying and selling securities.
Many technical price indicators are available, each with its unique formula and application. Some of the most popular technical indicators include:
- Average True Range (ATR) A volatility indicator used to measure the average range of price movement over a specific time period. It can be used to set stop-loss levels and determine position sizing.
- Chaikin's Volatility (CHV) A simple measure of volatility that compares the spread between a security's high and low prices. It can be used to adjust position sizing and identify potential trend reversals.
- Commodity Channel Index (CCI) A technical indicator used to identify potential price trends in commodity markets. It measures the difference between the current price of a commodity and its average price over a specific period.
- Detrended Price Oscillator (DPO) A trend-following indicator that focuses solely on the cycle component of a security's price action. It is designed to help traders identify potential turning points in a security's price trend.
- Moving Average Convergence/Divergence (MACD) A trend-following indicator used to identify potential trend changes in financial markets. It measures the difference between two moving averages of a security's price action and includes a signal line and a 9-day EMA of the MACD line.
- Mass Index (MI) A powerful technical analysis tool designed to identify trend reversals by measuring the range between high and low prices.
- Momentum (MOMENTUM) An indicator for measuring a security's price change over a specific time frame. It can help traders identify potential trend reversals or confirm the current trend's strength.
