What Are the Different Types of Indicators? Here's one answer...

[markos]

TYPES of INDICATORS (the 1st 5 are chart study categories)

(1) trend (direction, but NOT strength)
(2) momentum (strength, but NOT direction)
(3) volatility (measures risk rising, or risk dropping)
(4) overbought/oversold oscillators (is current high/low able to continue higher/lower, or is it an unsustainable extreme)
(5) money flow (is stock being accumulated or distributed)
(6) sentiment (too fearful? too euphoric?)
(7) breadth (healthy move or unhealthy move)

No reason to ever put 2 of the same type on one chart, but mixing them is acceptable and even encouraged.

What works well by itself or together with other indicators is purely a function of the type of market we're in - you don't need overbought/oversold indicators if the price isn't cycling!
# Source - Dunno, except he/she must have been a wise old sage ; ) #

 

[John808]

Hi @markos,

Really like this post. Would you be able to post 1 of the popular or most used study for each category for reference? Thanks again

 

[markos]

Hi @John808, Click the link below, go to Lounge Wisdom > 03 Technical Analysis.

In each Tab, JohnnyQuotron has the indicators listed in the order of popularity.

If you wouldn't mind, feel free to write down the top 2 or 3 in each and post here.
That's not something that I can make the time for, unfortunately.

https://1drv.ms/u/s!AnkeHrrRM_cvgxQTl1xckINYlKhZ <<< This is The Universe of Thinkscript located in the tutorial section.

 

[John808]

Hey @markos,

I may have worded my question incorrectly, was looking for general or common examples of each category to research a specific indicator later.
So from the one drive looks like (Hopefully I got the examples right lol)

(1) Trend- Moving averages, MACD
(2) Momentum- RSI, MACD
(3) Volatility- Average true range, ATR vs DTR
(4) Overbought/oversold oscillators- RSI, Stochastics, New High vs New low index?
(5) Money flow- Money flow index?

(6) Sentiment
(7) Breadth- Trendlines/price action, pullbacks, consolidation, higher high higher low, etc.

After looking at the one drive everything is pretty much labeled and I probably could've used google too lol
Sorry about that, thanks again for the response.

 

[markos]

@John808 Depending on your Technical Analysis experience, some indicators are easier to work with than others. Then, there is the question of what time frame does one use a certain indicator on? And, to that question there are many answers debated among the Chartered Market Technician (CMT) community. BEFORE you click this link, please Google Carl Swenlin, to get a good idea of where his daughter, Erin, and he are coming from. https://stockcharts.com/articles/sharedcharts.php?cc=8512197

 

[markos]

@John808 I'll reply to what you gleaned from above with my take on the list.
Many types are debated, some are set in stone.
Join the conversation if you feel otherwise!
Everyone, this is to pick out examples of types and may have my or your bias. Your indicators may be better for you. That's OK!
(1) Trend- Moving average Based: MACD, PPO, ADX, All the types of Moving Averages

(2) Momentum- Rate of Change: Stochastics, RSI, RSI in Laguerre Time (RSILg), my other favorite, TMO, Fractal Energy or Choppiness.

(3) Volatility- Average true range (ATR), Bolinger Bands, Keltner Channels <<< these last two are also combined in things called Squeezes. Not a fan...

(4) Overbought/oversold oscillators- StochasticRSI, Stochastics, New High vs New Low Index ($ADSPD etc), Up vs Down Volume ($UVOA-$DVOA)

(5) Money flow- Accumulation-Distribution: Money Flow Index, Twiggs Money Flow, OBV, Chaikin Money Flow

(6) Sentiment - AAII Weekly Sentiment, TDA's Investor Movement Index (IMX), TDA's Social Signals Tab

(7) Breadth- Trendlines/price action, pullbacks, consolidation, higher high higher low, NewHi vs NewLow Index, etc.

That's enough now, Markos, give it a rest...

 

[John808]

Wow @markos, thanks for the info on Carl Swenlin. The PMO indicator looks interesting and going to dive into more of Carl Swenlins work. I actually just started looking for a relative strength indicator that compares a stock I'm watching to an index. For example AAPL's price action to SPX or SPY.

I've been using the RSI Laguerre with Fractal Energy and really like it so far. This list actually helped me to understand what the goals are for most of the indicators out there. It also made sure I didn't have too many overlapping indicators. I don't want to add too many indicators before I get analysis paralysis lol.

 

[markos]

@John808 you are welcome. Some explanations of indicators can be found at Stockcharts.com and Tradingview.com. Google is your friend. Be sure to always confer with The Universe of Thinkscript in Tutorials as there maybe what your looking for in there. Personal note, the PPO and MACD are closely related and I rather prefer the MACD, even though I use neither.

For comparing Apple, ToS has Comparison / Correlation studies built in. Good trading!