Trend Indicators
Bar chart signals often conflict and it is difficult to separate the trend from the surrounding 'noise'. Trend indicators attempt to provide an objective measure of the direction of the trend. Price data is smoothed and the trend is represented by a single line, as in the case of a moving average. Because of the smoothing process the indicators tend to lag price changes and are often called trend following indicators.
Trending v. Ranging Markets
Most trend indicators lose money during a ranging market as fluctuations in a narrow price band tend to whipsaw traders in and out of their positions.
It is important to identify whether the market is trending or ranging and to employ indicators suited to the purpose: trend indicators for trending markets and the faster momentum indicators for ranging markets.
Types of Trend Indicators
Moving Average - Closing Price
Moving average
Two Moving Averages
Three Moving Averages
Moving Average Oscillator
MACD
MACD Histogram
TRIX Indicator
Smoothed Rate of Change
Moving Average - Overbought / Oversold
Price Envelope
Bollinger Bands
Directional Movement
Stop and Reverse System
Closing price compared to Moving Average
Commodity Channel Index
Detrended Price Oscillator
Price Averages
Median Price
Typical Price
Weighted Close
Price Comparison
Price Comparison
Price Ratio
Price Differential
