Indicator

A technical indicator is a mathematical formula applied to price and/or volume data that produces a visual overlay or separate window on your chart. Indicators help traders identify trends, momentum, volatility, and overbought/oversold conditions. They're one of the most widely used tools in forex trading.

Indicators fall into several categories: trend indicators (moving averages, Bollinger Bands) show direction, oscillators (RSI, Stochastic, MACD) measure momentum and extremes, volume indicators gauge participation, and volatility indicators (ATR) measure the size of price movements. Most traders use a combination of 2-4 indicators that complement each other.

The common beginner mistake is indicator overload — loading 10+ indicators on a chart looking for "confirmation" from all of them. Too many indicators create conflicting signals and analysis paralysis. Experienced traders tend to use fewer indicators and rely more on price action and a few trusted tools they understand deeply.