Indicators
Formulas that summarise what price has been doing. These terms explain the most used ones for trend, momentum, volatility and volume, what each really measures and where each one misleads.
17
terms in this topic
6
with a chart or figure
15
taught in an Academy lesson
12
other topics
17 terms, A to Z
- 7beginner
- 9intermediate
- 1advanced
- ATRWilder's measure of volatility: how far price typically moves per candle, including gaps. No direction.
- Bollinger BandsBBA 20-period SMA with bands two standard deviations above and below; narrow bands (a squeeze) often precede big moves.
- ConfluenceSeveral independent reasons pointing to the same price and direction; it raises the odds, never to certainty.
- DivergencePrice and an oscillator disagreeing: a higher high in price with a lower high in RSI, for example.
- Golden crossThe 50-day moving average crossing above the 200-day; the death cross is the cross below.
- IndicatorA formula applied to past prices or volume; it describes what price did and always lags.
- MACDThe gap between a 12 and a 26-period EMA, with a 9-period signal line and a histogram.
- MomentumThe speed and strength of a price move; oscillators like RSI and MACD measure it.
- Moving averageMAThe average closing price of the last N candles, recalculated each candle to smooth out noise.
- Open interestOIThe number of futures or options contracts that are open and not yet closed or settled.
- Overbought and oversoldOscillator readings at an extreme (RSI above 70 or below 30); they describe strength, not a turning point.
- Put-call ratioPCROpen interest (or volume) in put options divided by that in call options, used as a rough gauge of market mood.
- RSIWilder's momentum oscillator from 0 to 100 comparing recent gains with recent losses.
- StochasticA momentum oscillator comparing the close with the recent high-low range.
- VolatilityHow much and how fast price moves; high volatility means bigger swings in both directions.
- Volume profileVolume shown by price instead of by time; the busiest price is the point of control (POC).
- VWAPThe volume-weighted average price of the session; above it leans bullish, below it bearish.