In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. Technical Indicators are the often squiggly lines found above, below and on-top-of the price information on a technical chart. Indicators that use the same scale as prices are typically plotted on top of the price bars and are therefore referred to as "Overlays."
Common technical analysis indicators are the moving average convergence-divergence (MACD) indicator,Stochastic and the relative strength index (RSI).
Moving averages are one of the most popular and easy to use tools available to the technical analyst. They smooth a data series and make it easier to spot trends, something that is especially helpful in volatile markets. They also form the building blocks for many other technical indicators and overlays.
