Technical indicator

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In technical analysis, a technical indicator is a mathematical calculation based on historic price, volume, or (in the case of futures contracts) open interest information that aims to forecast financial market direction.[1] Technical indicators are fundamental part of technical analysis and are typically plotted as a chart pattern to try to predict the market trend.[2] Indicators generally overlay on price chart data to indicate where the price is going, or whether the price is in an "overbought" condition or an "oversold" condition.

Many technical indicators have been developed and new variants continue to be developed by traders with the aim of getting better results. New Indicators are often backtested on historic price and volume data to see how effective they would have been to predict future events.

References[edit]

  1. ^ Murphy, John J. (1999). Technical analysis of the financial markets : a comprehensive guide to trading methods and applications (2nd ed. ed.). New York [u.a.]: New York Inst. of Finance. ISBN 0735200661. 
  2. ^ "Technical Indicators". MLQ4 Community. Retrieved September 29, 2014.