In technical analysis, various indicators are widely used to determine trends or derive trading signals. The two main categories are trend-following indicators and oscillators. Additionally, there are volume, trend strength, volatility, sentiment and market breadth indicators, which are often used as filter rules or for further confirmation.
Classic trend-following indicators, such as moving averages, are frequently used to determine trends. A combination of different period lengths or crossovers with the price can also be used as trading signals.
Oscillators such as the Relative Strength Index (RSI) primarily indicate overbought and oversold levels but can also be used to generate trading signals. Oscillators are usually used in combination with classic trend-following indicators. Generally, oscillators are also referred to as leading indicators because they often anticipate the price direction.
Intermarket analysis
Intermarket analysis examines the relationships between different markets, attempting to identify correlations and utilize trading signals. It provides a way to visualize macroeconomic relationships and contributes to a deeper understanding of market interactions.
Author
DI Nikolaos Nicoltsios
Trader and developer of trading systems