What are Technical Indicators or Technicals?
Technical indicators or technicals are special mathematical formulas used for analyzing and predicting market trends. They are used extensively by short-term traders like day traders and swing traders to find right stocks to trade.
Technical indicators give results by evaluating and comparing present and past price patterns for individual stocks. They do not utilize any company data, like profit and increase/decrease in company income, for this purpose. That is why technical indicators are less useful for position traders and other long-term investors. But they are useful in finding entry and exit points for all sorts of traders.
Technical indicators can be classified in to two as “Trend indicators” and “Oscillators or Momentum indicators”. Trend indictors are technical indicators primarily based on price performance. On the other hand momentum indicators also take trading volume in to account. Some popular technical indicators are money flow index, relative strength index, MACD, Stochastics and Bollinger bands. Today many types of trading systems are available incorporated with technical indicators. Advanced systems offer more customizing features and faster results.
Technical indicators give results by evaluating and comparing present and past price patterns for individual stocks. They do not utilize any company data, like profit and increase/decrease in company income, for this purpose. That is why technical indicators are less useful for position traders and other long-term investors. But they are useful in finding entry and exit points for all sorts of traders.
Technical indicators can be classified in to two as “Trend indicators” and “Oscillators or Momentum indicators”. Trend indictors are technical indicators primarily based on price performance. On the other hand momentum indicators also take trading volume in to account. Some popular technical indicators are money flow index, relative strength index, MACD, Stochastics and Bollinger bands. Today many types of trading systems are available incorporated with technical indicators. Advanced systems offer more customizing features and faster results.
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