Serial Trend Indicators: Introduction

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Serial Trend Indicators: Introduction

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In technical analysis, the main goal of trend indicators is to determine objectively the direction of the trend by refining the fluctuating nature of volatile prices. There are a variety of different trend indicators that can be used for technical analysis but these indicators tend to be lagging indicators because they are usually based on historical price action. So the movement of this trend indicator follows the price action rather than guiding it. Some trend indicators, such as MACD, can also measure trend strength.

The most widely used trend indicator is the moving average (MA). Other popular trend indicators include: Moving Average Index (ADX) from Directional Movement Index (DMI), Parabolic SAR, Price Oscillator, Zig Zag, and trend lines. This indicator is widely used to develop strategies following trends in the trading system and plus the identification of price chart patterns and spread and volume analysis.

As a practical application, extending the period for non-oscillatory trend indicators will provide a clearer indication for this trend. However, for an oscillator, shorter periods are preferred because shorter period oscillators will be more sensitive to price changes and will signal a faster turning point. This is where the differences from trend indicators and oscillator indicators.

Also this trend indicator could be in the price chart and some of it is placed in a different room with the price chart.

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