Technical analysis indicators are the mathematical formulae that day traders use on their charts to decide when to make their trades. The following are the popular indicators are explained:

 1. The MACD is the difference between short term (EMAS) and long term (EMAL) exponential moving averages, and is often used with a signal line that is an exponential moving average of the MACD (EMAMACD). 
As the MACD is a momentum indicator, it shows positive momentum when it is above the zero line, and negative momentum when it is below the zero line.

 2. The Directional Movement Index: (also known as DMI) is a momentum indicator. It is calculated using the price, compares the current price with the previous price range, and displays the result as an upward movement line (+DI), and a downward movement line (-DI), between 0 and 100. The DMI also calculates the strength of the upward or downward movement, and displays the result as a trend strength line (ADX). The Directional Movement Index can be used in both ranging and trending markets. In general, when the +DI line is above the -DI line, the market is moving upwards, and when the -DI line is above the +DI line, the market is moving downwards. The ADX line shows the strength of the move, and the market is considered to be trending when the ADX line is above 30, and ranging when the ADX line is below 30.

3. Moving averages: can be used to identify a trend by using the slope of the average. They can also be used in trend trading systems to enter and exit trades by waiting for price and moving average crossovers, or for multiple moving average crossovers. Moving averages are also used in the calculations of MACD. Moving averages are usually used to show the mean price over a certain number of previous prices. There are several different types of moving averages, and they are all calculated slightly differently, but they all have a similar smoothing effect on the data, so that any unexpected price changes are removed, and the overall direction is shown more clearly.

4. Pivot Points: are support and resistance levels that are calculated using the open, high, low, and close, from the previous trading day. Standard pivot points include the pivot point itself, three full support levels, and three full resistance levels, but two half way support levels, and two half way resistance levels are also often included. Daily pivot points are the most commonly used, but weekly and monthly pivot points are also available. Pivot points are displayed on charts with the price bars, and are the horizontal lines in the chart shown above. Pivot points are used as support and resistance levels, and as areas where significant price movement should be expected (such as reversals, or breakouts). There are several trading systems that use pivot points, so there are several different uses of pivot points, but in general they are used as support and resistance levels.

5. The Relative Strength Index: (also known as RSI) is a momentum indicator. It is calculated using the price, and is used as an oscillator showing overbought and oversold levels. The RSI compares the upward price movement to downward price movement over the specified timeframe, and displays the result as a momentum line oscillating between 0 and 100. The RSI can be used in both ranging and trending markets, and therefore can be used in several different ways. The RSI can be used to identify an overbought level when it is above 70, and an oversold level when it is below 30. 

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