




A technical indicator is a series of values derived (i.e. using a mathematical formula) from historical data of an asset (e.g. price, volume). A common use of a technical indicator is to try to predict future price movements using prior price data. Some examples of a technical indicator are the simple moving average (SMA), the relative strength index (RSI), and the exponential moving average (EMA). The data from one technical indicator can be combined with another's to form a third technical indicator such as the moving average convergence/divergence (MACD) which might compare SMAs from a short time period to a longer one. The data from a technical indicator can confirm price trends, show an imminent price reversal, identity entry points for a trade and clean "noise" from a price chart. Technical indicators are primarily used by chartists as opposed to fundamental traders that prefer to trade based on criteria such as P/E ratios rather than a technical indicator.
Rate this technical indicator definition...




Where is the market headed? The answer may surprise you. Find out with the exclusive & Barron's recommended charts of Chart of the Day. 

Popular Terms: average price per share, labor relations, APR, in escrow, liquidity ratio, retained earnings, cancelled check, required rate of return, quality assurance, annual return, stock market close, VIX, exdividend date, FICO score, implied volatility, limit order, stock split, 1031 exchange, whollyowned subsidiary, EBITDA, option premium, real GDP, exdividend, reverse mortgage, inflation, deferred tax, class C shares, dividends payable, command economy, debt service coverage, irrevocable trust, margin rate, minority interest, balance sheet, per diem, FTSE, 1035 exchange, current ratio, risk management, diluted share, 144a, phantom income, LIBOR, open position, Zero Cost Collar, 401a, covered put, deferred revenue, Key Rate Duration


 