# Technical Indicators A ~ Z

## What are Technical Indicators?

Technical indicators highlight a particular aspect of price or volume behavior on a stock chart to provide valuable insights and help with analysis.

Below is an example of a technical indicator (MACD) displayed below the NVDA stock chart.

## How To Use Technical Indicators

### Indicator Basics

What indicators to use and when to use them.

### Indicator Signals

Respect, whipsaws, divergence, and failure swings.

### Indicator Time Frames

A key principle when using indicators: set the time frame to reflect the cycle being traded.

### Technical Indicators A to Z

A complete guide of the indicators available with the Incredible Charts software.

### Fibonacci Numbers

Fibonacci numbers are named after Leonardo Fibonacci, a twelfth century Italian mathematician, who discovered unique properties of the 1,1,2,3,5,8.... number sequence.

## Stock Market Indicators

### Trend Indicators

Used to measure trend direction, moving averages are only one of many important trend indicators.

### Volume Indicators

Volume indicators confirm the strength of trends and warn of reversals.

### Volatility Indicators

Volatility provides additional confirmation of price behavior, along with volume.

### Momentum Indicators

Momentum, Rate of Change, Relative Strength and Stochastic are the most popular oscillators. All fluctuate between overbought and oversold levels.

## Compare Relative Strength

### Price Comparison

A potent stock selection tool, Price Comparison charts the performance of a stock against an index or a related stock.

### Price Ratio

A powerful tool for stock selection, Price Ratio is often referred to as relative strength or comparative strength. It compares the performance of a stock relative to an index or a related stock.

### Price or Yield Differential

Compare bond yields or interest rates that share the same price axis.

## Moving Averages

### Moving Averages

The Moving Average is a powerful measure of trend direction, achieved by smoothing price data. Moving Averages can also be used on median,typical and weighted closing prices as well as other indicators.

### Selecting Long-Term Moving Averages

When tracking the primary trend you are faced with a wide choice of moving averages.

### Moving Averages High/Low

A new variation on the moving average system is to calculate moving averages on the Highs or Lows, rather than on the Close.

### Price Envelope

Sometimes referred to as Percentage Bands, price envelopes are plotted at a set percentage above and below a moving average.

## Moving Average Systems

### Single Moving Average

A simple moving average system, often combined with filters for greater effectiveness.

### Two Moving Averages

Fast and slow moving averages provide a powerful measure of trend strength and direction.

### Three Moving Averages

A more sophisticated system that uses a third moving average to identify ranging markets.

### Trading with Moving Averages

Fast and slow moving averages can provide potent market signals.

### Multiple Moving Averages

Daryl Guppy uses multiple moving averages to measure trends and identify likely reversals. The indicator compares multiple short-term and long-term exponential moving averages.

### Rainbow 3D Moving Averages

Ivan Ballin's variation of Multiple Moving Averages.

## Moving Average Oscillators

### Commodity Channel Index

The Commodity Channel Index (CCI) highlights overbought and oversold markets and likely turning points.

### Detrended Price Oscillator

This immensely powerful indicator isolates the short cycle and provides excellent trend signals.

### MACD

MACD (Moving Average Convergence Divergence) is a powerful refinement of the two moving averages system, providing reliable signals of trend changes.

### MACD Histogram

The MACD Histogram (Moving Average Convergence Divergence Histogram) provides far earlier and more responsive signals than the original MACD. Unfortunately it is also more volatile.

## Trend Indicators

### Directional Movement

A sophisticated indicator by Welles Wilder, Directional Movement is one of few indicators that signals whether a trend is suitable to trade.

### Parabolic SAR

Developed by J. Welles Wilder, this sophisticated indicator provides excellent entry and exit points in trending markets.

## Momentum Indicators

### Momentum

Momentum measures trend strength and identifies likely reversal points. A simple but effective measure of rate of change of prices.

### Negative Volume

Norman Fosback uses Negative Volume Index (NVI) with Positive Volume Index (PVI) to identify bull markets.

### Positive Volume

Introduced by Norman Fosback, Positive Volume Index identifies bull and bear markets by measuring activity on days when volume is higher.

### Rate Of Change (Price)

A refinement of Momentum - Rate of Change is designed to fluctuate as a percentage around the zero line.

### Relative Strength Index (RSI)

A very popular momentum oscillator developed by Welles Wilder, RSI (Relative Strength Index) compares upward and downward movements in closing price.

### Smoothed Rate of Change (SROC)

Smoothed Rate of Change (SROC) was first introduced by Fred G Schutzman in Futures magazine, April 1991. The oscillator performs a similar function to the Momentum and Rate Of Change indicators.

### TRIX Indicator

Designed for trading trends, TRIX uses a triple-smoothed moving average to eliminate cycles shorter than the indicator period.

### Twiggs^{®} Momentum Oscillator

Twiggs Momentum Oscillator is Colin Twiggs' derivation of the Rate Of Change oscillator. Its primary purpose is to identify fast trending stocks.

### Coppock Indicator

Edwin Coppock designed this oscillator with one sole purpose: to identify the commencement of bull markets.

## Range Oscillators

### Elder Ray Index

Developed by Dr Alexander Elder, the Elder-ray indicator measures buying and selling pressure in the market. The Elder-ray is often used as part of the Triple Screen trading system.

### Mass Index

Donald Dorsey predicts trend reversals by comparing trading range over a 9 day period.

### Slow Stochastic

The Slow Stochastic provides more reliable signals than the original indicator. It applies further smoothing to reduce volatility and improve accuracy.

### Stochastic Indicator

Developed by George Lane to track market momentum, the stochastic oscillator comprises two lines: %K and %D.

### Vertical Horizontal Filter (VHF)

Created by Adam White, Vertical Horizontal Filter (VHF) identifies trending and ranging markets.

### Williams %R

Williams %R is similar to Stochastic %K - except that Williams %R is plotted using negative values.

### Williams Accumulate Distribute

Larry Williams highlights accumulation and distribution by comparing daily trading ranges. Signals are taken on divergences.

### Williams Accumulation Distribution

Williams Accumulation Distribution is traded on divergences. When price makes a new high and the indicator fails to exceed its previous high, distribution is taking place.

## Money Flow Indicators

### Accumulation Distribution

Measures the commitment of bulls and bears, giving advance warning of trend changes.

### Chaikin Money Flow

Another popular indicator by Marc Chaikin based on the Accumulation Distribution line. The Chaikin Money Flow indicator often warns of breakouts and provides useful trend confirmation.

### Chaikin Oscillator

Marc Chaikin's chaikin oscillator monitors the flow of money in and out of the market.

### Money Flow Index

Money Flow Index measures trend strength and warns of likely reversal points.

### Twiggs^{®} Money Flow

Twiggs Money Flow is Colin Twiggs' derivation of the popular Chaikin Money Flow indicator.

## Volume Indicators

### Volume

Volume highlights unusual trading activity and provide powerful confirmation of price signals.

### Rate of Change (Volume)

The rate of change formula can also be applied to volume, where it highlights changes in volume activity.

### Volume Oscillator

An easy to use oscillator that highlights changes in volume activity.

## Price-Volume Indicators

### Force Index

Developed by Dr Alexander Elder, the Force index combines price movements and volume to measure the strength of bulls and bears in the market.

### On Balance Volume

Developed by Joseph Granville, OBV provides a powerful measure of accumulation and distribution by comparing volume to price movements.

### Price Volume Trend

Measures the strength of trends and warns of reversals.

## Range-Volume Indicators

### Ease of Movement

Developed by Richard W Arms, this powerful indicator highlights the relationship between price and volume.

### Equivolume Charts

The greatest advance in the last decade, equivolume exposes price and volume interaction.

## Range Volatility Indicators

### Average True Range

Welles Wilder developed Average True Range to measure commitment in a trending market.

### Chaikin Volatility

Developed by Marc Chaikin, volatility is measured as the range between high and low prices.

### Volatility Ratio

The Volatility Ratio identifies days with exceptionally wide trading ranges (the distance between High and Low) and is used to signal likely reversal days.

### Volatility Ratio - Schwager

This ratio is similar to that used by Jack Schwager in Technical Analysis to identify wide-ranging days.

## MA Volatility Indicators

### Bollinger Bands

Invented by John Bollinger, the bands offer powerful support for signals from trend or momentum indicators. Bollinger Bands are calculated at a specified number of standard deviations above and below the moving average, causing them to widen when prices are volatile and contract when prices are stable.

### Volatility

Volatility is a statistical measure called the coefficient of variation.