Beginner's Guide To Stockcharts.com: Indicators
Indicators are calculations based on price and volume history of a ticker. There are many different indicators, each with a unique formula used to measure such things as volatility, momentum, trend and money flow. Indicators can be displayed in additional panels above or below the main price panel, or in some case right on the chart behind price. To add an indicator, simply select it in the dropdown list, modify any of the default parameters if so desired, and select the position where it should appear (Below, Above or Behind Price). Many of the indicators have complicated formulas, and entire books can and have been written on several of them. As such, below is a list of each indicator with only a quick description of each.
The Available Indicators are:
- Price - The price data for a specified ticker. There are many creative ways to use price including overlaying it on a chart for a comparison or even creating a ratio that is relevant to the chart.
See below for more on ratio charts
- Price Performance - The percentage change of the closing value for a ticker. The starting point for the formula is the first closing value on the left edge of the chart.
- Volume - The volume data for a specific ticker. Volume can be displayed as an overlay behind price or in its own individual panel.
- SCTR Line - The Channellines Technical Rank (SCTR) is a numerical score that ranks a stock within a group of stocks.
- RSI - Relative Strength Index is one of the most commonly used technical indicators. The momentum oscillator compares the magnitude of recent gains to recent losses in an attempt to determine when the ticker is overbought or oversold. (For related reading, see An Introduction To The Relative Strength Index.)
- MACD - The moving average convergence indicator is another very popular oscillating indicator formed from the difference of two specified exponential moving averages. The MACD is a collection of three signals; The MACD line, the signal line (or average line), and the difference (or divergence).
- MACD Histogram - The difference between the MACD line and its signal line displayed as a histogram. This version omits the actual MACD line or the signal line in favor of solely the histogram.
- PPO - The Percentage Price Oscillator (PPO) is a percentage based version of the MACD.
- Detrended Price (DPO) - The Detrended Price Oscillator (DPO) removes long term trend information from the data in order to favor short term data.
- CCI - Commodity Channel Index is an oscillator that quantifies the relationship between the ticker's price, a moving average of the ticker's price and normal deviations from that average.
- ROC - The Rate of Change indicator measures the difference in price from the difference in "x" periods prior.
- TRIX - The Triple Exponential Average is a momentum indicator that shows the percentage rate of change in a triple exponentially smoother moving-average of the stocks closing price. (For related reading, see Advantages of TRIX- Triple Exponential Average.)
- Ultimate Oscillator - The Ultimate Oscillator is a technical indicator that uses the weighted average of three different time periods to reduce the volatility often associated with other indicators relying on single time periods.
- Full Stochastics - A momentum based indicator that shows the location of the close relative to the high-low price range over a set number of periods. Full Stochastics allows for three parameters allowing for complete control over the indicator.
- Slow Stochastics - The Slow Stochastics indicator is a simpler version that allows for only two parameters and has a smoothing component.
- Fast Stochastics - Fast Stochastics also allows for two parameters with no smoothing component.
- StochRSI - An Oscillator that uses the Stochastics oscillator on the RSI indicator instead of on closing values.
- On Balance Volume - A cumulative sum of volume for positive days minus volume for negative days.
- Accum/Distribution - A weighted sum of volume for positive days minus volume for negative days.
- Chaiken Oscillator - An oscillator based on the movement of the Accumulation/Distribution line. (For related reading, see Discovering Keltner Channels and the Chaikin Oscillator.)
- Chaiken Money Flow - An oscillator that combines price and volume to estimate money flow in and out of equity.
- Money Flow Index - A momentum based indicator like RSI that includes volume in its calculations.
- Force Index - Introduced by Alexander Elder, the Force Index is a price and volume oscillator that attempts to determine if a ticker's strength is waning or strengthening.
- PVO - The Percent Volume Oscillator (PVO) is a volume based version of the Price Percent Oscillator (see above).
- Wilder's DMI (ADX) - A system of three lines designed to reveal the direction and strength in a ticker's current trend.
- Average True Range (ATR) - A volatility based indicator that measure the average of each periods high and low to calculate its "True Range."
- Aroon - An indicator designed to determine the trend of a ticker based on the number of days since a recent high or low has been set.
- Aroon Oscillator - An oscillator formed from the two lines that make up the Aroon system.
- Bollinger Band® Width - The absolute distance from the top Bollinger Band® to the Bottom Bollinger Band®.
- Bollinger Percent B - An oscillator showing where price is in relation to the upper and lower Bollinger Band®.
- Correlation - The correlation coefficient is a statistical measure that reflects the correlation between two tickers and a specified period of time.
- Slope (Regression) - The rise or fall in closing values divided by the specified number of periods.
- Standard Deviation - A statistical measure of volatility (For related reading, see Understanding Volatility Measurements.)
- Date/Time Axis - An additional horizontal axis can be displayed on a chart.
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