Indicators: the families

The four families of technical indicator, what each one measures, and the arithmetic underneath. Start here if the vocabulary is new.

1. 01
   What a technical indicator is, and what it isn’tAn indicator is arithmetic performed on price and volume. Everything it knows, you could have worked out yourself with enough time.
2. 02
   Lagging and leading: why most indicators follow priceEvery indicator is computed from bars that have already closed. The distinction between lagging and leading is smaller than the words imply.
3. 03
   Overlays and oscillators, and where each sits on a chartSome indicators are drawn in the same units as price. Others are not, and cannot be. Where an indicator lives on the screen tells you what it measures.
4. 04
   Trend indicators: what a moving average smooths awayA moving average answers one question — what has the average price been? Everything else people read into it is inference.
5. 05
   Momentum indicators: RSI, stochastics, rate of changeMomentum measures how fast price is moving, not where it is going. The word “overbought” has caused more losses than any other term in technical analysis.
6. 06
   Volatility indicators: ATR, Bollinger Bands, Keltner channelsVolatility measures how much price moves, never which way. This is the family True Range Research is built on, so it gets the most detail.
7. 07
   Volume indicators: VWAP, on-balance volume, volume profileVolume is the only common input that is not derived from price. That makes it genuinely independent — and easy to misread.

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