Education

• Print
• E-Mail

that are in a strong trend. They can show a market at either an

overbought or oversold reading for an extended period while the

market continues to trend strongly. Another example of oscillators

not working well is when a market trades into the upper boundary of

a congestion area on the chart and then breaks out on the upside of

the congestion area. At that point, it’s likely that an oscillator

would show the market as being overbought and possibly generate a

sell signal when, in fact, the market is just beginning to show its

real upside power.

From a list of

literally hundreds of technical indicators, we have selected the

more popular ones to illustrate what is available. These technical

indicators can be put into several categories:

Strength and

Sentiment Indicators

Although most technical indicators are based on

price data and various manipulations of that data, a few are based