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Technical Indicator

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Definition of 'Technical Indicator'

A Technical Indicator is an indicator that is derived from the price and/or volume of a traded asset such as a commodity, stock, future, or currency. Using mathematical formula, charting packages and traders create and watch indicators to signal trade entries and to manage portfolio positions with these indicators.

The simplest and most popular type of indicator is the Moving Average (MA). Of the moving averages the SMA (Simple Moving Average) is the easiest to calculate and understand.

Other popular technical indicators include the MACD.

Compare to Economic Indicators.

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