




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


 