Overview of Indicators

    Indicators can be used to help you obtain a better understanding of how prices might change in the future, although there are many different types that can come with many different interpretations. There are leading and lagging indicators and oscillator and momentum indicators. A great way to use indicators is to combine a couple of them to get the best idea of how prices might change in the future.

    The difference between a leading and a lagging indicator is that leading indicators can be used to predict what will happen to a price in the future while a lagging indicator is used to confirm or deny any trends that are or have already happened.

    Oscillator indicators all "oscillator" or vary back and forth between a central value, while also can warn of the end of a trend. For example, the Relative Strength Index (RSI) indicator oscillates around the number 50 as it crosses back and forth between that number.

    Momentum indicators are indicators that aren't bound to a range and can be used to confirm a trend once it has started.

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