ZZ variation

Technical indicators are commonly classified by both their function and their display method on a chart.

According to financial analysis literature, indicators fall into several functional categories. Trend indicators include simple moving averages, exponential moving averages, and the Moving Average Convergence Divergence or MACD. These identify the direction and persistence of price movements.

Momentum indicators include the Relative Strength Index and the Stochastic oscillator. These measure the rate of price change. They also identify overbought and oversold conditions.[2]

Volume indicators include On-balance volume and the Money Flow Index. These measure the buying and selling pressure reflected in trading volume.

Volatility indicators include Bollinger Bands and Average True Range. These assess the degree of price fluctuation.

Support and resistance indicators include Fibonacci Retracements. These project price levels where buyers or sellers may enter or exit the market.[3]

Indicators[4] are also distinguished by their display method and timing. Overlay indicators are plotted directly on a security's price chart, while oscillators are plotted in a separate window fluctuating between specified bounds.[5] This distinction often correlates with their predictive nature: oscillators are frequently utilized as leading indicators to signal potential price reversals, whereas overlay tools generally function as lagging indicators to confirm established trends.[6]