Indicators and Tools

• Moving AverageBeginner7 min read

  A moving average is the average price over a fixed number of recent periods, recalculated each period to smooth out short-term noise.

• Relative Strength IndexIntermediate6 min read

  The Relative Strength Index is an oscillator from 0 to 100 that compares recent gains with recent losses to gauge the momentum of a move.

• MACDIntermediate6 min read

  MACD (Moving Average Convergence Divergence) tracks the gap between two exponential moving averages to show changes in a trend's momentum.

• Bollinger BandsIntermediate6 min read

  Bollinger Bands are lines drawn a set number of standard deviations above and below a moving average, widening and narrowing with volatility.

• Fibonacci Retracement and ExtensionIntermediate6 min read

  Fibonacci tools draw levels at ratios such as 38.2%, 50% and 61.8% of a previous move (retracements) or beyond it (extensions), which traders watch as possible turning points.

• DivergenceIntermediate5 min read

  Divergence is when the price and an indicator disagree — for example a higher high in price but a lower high in RSI — suggesting the move is losing strength.

• Average True RangeIntermediate5 min read

  The Average True Range (ATR) measures how much an asset typically moves per period, including gaps; traders use it to size stops and positions.

• Overbought and OversoldIntermediate5 min read

  Overbought and oversold describe prices that have risen or fallen unusually far, unusually fast — often judged with oscillators such as RSI. Neither guarantees a reversal.

• Volume-Weighted Average PriceIntermediate5 min read

  VWAP is the average price of all trades in a period weighted by their volume, often reset each trading day and used as a fair-value reference.

• Stochastic OscillatorIntermediate5 min read

  The stochastic oscillator shows where the latest close sits within the recent high–low range, on a scale from 0 to 100.

• Leading and Lagging IndicatorsIntermediate4 min read

  Lagging indicators, such as moving averages, confirm moves after they start; leading indicators, such as some oscillators, try to anticipate them but give more false signals.

• Technical IndicatorBeginner4 min read

  A technical indicator is a calculation based on price, volume or both, plotted on or beneath a chart, that summarises some aspect of market behaviour.

• Average Directional IndexAdvanced3 min read

  The Average Directional Index (ADX) measures the strength of a trend, not its direction; readings above about 25 are commonly read as a strong trend.

• Average Daily RangeIntermediate3 min read

  The average daily range is the average distance between each day’s high and low over a period, such as 14 or 20 days. Unlike the average true range, it ignores gaps between one day’s close and the next day’s open.

• Commodity Channel IndexAdvanced3 min read

  The Commodity Channel Index (CCI) measures how far the price is from its recent average relative to its typical deviation; despite the name, it is used on any market.

• Change-Point DetectionAdvanced3 min read

  Change-point detection is a set of statistical methods for finding moments when a series’ behaviour — its average, volatility or trend — changes. Traders use it to spot shifts in market regime.

• ConfluenceIntermediate3 min read

  Confluence is when several independent reasons point to the same price level or trade idea, such as support, a moving average and a Fibonacci level together.

• GARCH ModelAdvanced3 min read

  A GARCH model is a statistical model of volatility that changes over time, in which today’s volatility depends on recent shocks and recent volatility. It captures volatility clustering and is widely used in risk models.

• Granger CausalityAdvanced3 min read

  Granger causality is a test of whether past values of one series help forecast another. Despite the name it shows predictive usefulness, not true cause and effect.

• Ichimoku CloudAdvanced3 min read

  The Ichimoku Cloud is a Japanese indicator system of five lines; the shaded cloud between two of them is used to judge trend, momentum and support or resistance.

• Market Profile and TPOAdvanced3 min read

  Market Profile organises price by time: each time period (often 30 minutes) is shown as a letter, called a time-price opportunity (TPO), at every price traded in that period. The result shows where the market spent the most time — the value area and point of control.

• On-Balance VolumeIntermediate3 min read

  On-balance volume (OBV) adds a period's volume when the price closes up and subtracts it when it closes down, creating a running total of volume pressure.

• Parabolic SARIntermediate3 min read

  Parabolic SAR plots dots above or below the price that move closer as a trend continues and flip sides when it reverses, often used for trailing stops.

• Pivot PointsIntermediate3 min read

  Pivot points are support and resistance levels calculated from the previous period's high, low and close, widely used by intraday traders.

• Autocorrelation, Hurst Exponent and CointegrationAdvanced3 min read

  Autocorrelation measures how strongly a series is related to its own past values. The Hurst exponent estimates whether a series tends to persist (above 0.5), revert (below 0.5) or behave randomly (about 0.5). Cointegration means two series that wander individually stay linked over the long run — the statistical basis of many pairs trades.

• Trading SignalBeginner3 min read

  A trading signal is a condition that a strategy treats as a reason to buy or sell; a false signal is one that triggers but is not followed by the expected move.

• Volume ProfileAdvanced3 min read

  A volume profile is a horizontal histogram showing how much volume traded at each price over a period, highlighting levels where most activity happened.

• ZigZag IndicatorBeginner4 min read

  The ZigZag indicator draws straight lines between significant swing highs and lows, ignoring any move smaller than a set percentage (often 5%). It cleans up noise to show market structure, but it has no predictive power because its last line can change.

• Keltner ChannelsIntermediate4 min read

  Keltner Channels are volatility bands drawn above and below an exponential moving average, usually a 20-period EMA plus and minus two times the Average True Range. The EMA shows direction and the ATR sets the width.

• Donchian ChannelsBeginner3 min read

  Donchian Channels plot the highest high and lowest low over a set number of periods, usually 20, with a midline between them. A close above the upper band signals a breakout; the Turtle traders famously used them for trend-following entries.

• Aroon IndicatorIntermediate4 min read

  The Aroon indicator measures how many periods have passed since the latest high (Aroon-Up) and low (Aroon-Down) within a look-back window, usually 25. Readings near 100 mean a fresh extreme; Aroon-Up above Aroon-Down suggests an uptrend.

• Williams %RBeginner3 min read

  Williams %R is a momentum oscillator that shows where the close sits relative to the highest high of the last 14 periods, on a scale from 0 to −100. Readings from 0 to −20 are overbought and −80 to −100 oversold.

• Money Flow IndexIntermediate3 min read

  The Money Flow Index is a 0–100 oscillator that combines price and volume to measure buying and selling pressure, often called a volume-weighted RSI. Readings above 80 are overbought and below 20 oversold; the default period is 14.

• Chaikin Money FlowIntermediate4 min read

  Chaikin Money Flow measures buying and selling pressure by summing money flow volume over a set period, usually 20 or 21 days, and dividing by total volume. It swings above and below zero: positive suggests accumulation, negative suggests distribution.

Each term is defined in one sentence. Terms marked “Article in preparation” will get a full step-by-step article.

• Arms Index (TRIN)TRIN

  AdvancedGlossary

  The Arms Index, or TRIN, compares how many stocks are rising versus falling with how much volume flows into each group. A reading near 1 is balanced; well above 1 means heavy volume in falling stocks, which short-term traders often read as oversold.

• Hindenburg Omen

  AdvancedGlossary

  The Hindenburg Omen is a breadth-based warning signal that fires when an unusually large number of NYSE stocks hit both 52-week highs and 52-week lows while the market is still rising — a sign of a split, unhealthy market. It gives many false alarms.

• Linear Regression Channel

  AdvancedGlossary

  A linear regression channel draws the best-fit straight line through prices over a period, with parallel lines a set number of standard deviations above and below it. It shows the trend's slope and how far price has stretched from it.

• Market Breadth

  IntermediateArticle in preparation

  Market breadth measures how many stocks take part in a move. The advance-decline line adds up advancing minus declining stocks each day; if an index rises while fewer stocks do, the rally is narrow and may be weakening.

• McClellan Oscillator

  AdvancedGlossary

  The McClellan oscillator is a breadth indicator: the difference between the 19-day and 39-day exponential moving averages of net advances (advancing minus declining stocks). Readings above zero show broad buying, below zero broad selling.

• Oscillator

  BeginnerArticle in preparation

  An oscillator is an indicator that swings within set bounds or around a centre line, such as RSI, Stochastic or CCI. Oscillators help spot stretched moves and fading momentum in ranges, but they can stay overbought or oversold for long stretches in strong trends.

• SuperTrend

  IntermediateArticle in preparation

  SuperTrend is a trend-following line built from the Average True Range. It sits below price in an uptrend and above it in a downtrend, and flips when price closes through it — which makes it popular as a trailing stop.

• TICK Index

  AdvancedGlossary

  The NYSE TICK index counts how many stocks last traded on an uptick minus how many on a downtick, moment by moment. Day traders read extreme readings, such as above +1,000 or below −1,000, as signs of broad buying or selling pressure.