How indicators work

prices through the study of past market data, primarily price and volume.

Technical indicators are heuristic or pattern-based signals produced by the price, volume, and/or open interest of an asset.
They are used by traders who follow technical analysis.
By analyzing historical data, technical analysts use indicators to predict future price movements.

What are indicators

*Indicators are never 100% guarantee of correct signals

headed.
Lagging
Offer a historical report of background conditions that resulted in the current price being where it is.

Types of technical indicators

trend by comparing prices to an established baseline.
Momentum indicators
May identify the speed of price movement by comparing the current closing price to previous closes.

Volatility Indicators
Measures the rate of price movement, regardless of direction
Volume Indicators
Measures the strength of a trend based on volume of shares traded.

of market research: trend, momentum, volatility and volume.
Once added effective indicators for each category, now you may begin the process of tweaking inputs to match the trading styles, risk tolerance, type of trading and duration.

How to choose an indicator

is overbought or oversold

Parabolic will show the momentum

B.B will show us the volatility

Note: “past performance is not an indicator of future performance”

WWV will show us the volume being traded