Trend indicators, explained for Indian traders
Trend indicators smooth out price to reveal its underlying direction and help you trade with the flow rather than against it. From the humble moving average to the Ichimoku Cloud, they answer one question: is this market trending, and which way?
What are trend indicators? Trend indicators are technical tools that identify and follow the direction of a market's movement by smoothing price data. The most widely used are moving averages (SMA, EMA), Supertrend, the Ichimoku Cloud and Parabolic SAR — all lagging indicators that confirm trend rather than predict it.
Moving Average MA
TrendA moving average is a trend indicator that averages price over a set number of recent bars to smooth out noise and reveal the underlying direction, u…
Simple Moving Average SMA
TrendA simple moving average is the arithmetic mean of the last N closing prices, giving every bar in the window equal weight, which produces the smoothes…
Exponential Moving Average EMA
TrendAn exponential moving average is a moving average that weights recent prices more heavily using an exponential decay, so it reacts faster to new pric…
Weighted Moving Average WMA
TrendA weighted moving average assigns linearly decreasing weights to the prices in its window, so the most recent bar carries the most weight and the old…
Hull Moving Average HMA
TrendThe Hull Moving Average, created by Alan Hull in 2005, combines weighted moving averages of different lengths to produce a line that is both very smo…
Volume Weighted Moving Average VWMA
TrendA volume weighted moving average is a moving average that weights each bar's price by its trading volume, so prices set on heavy volume influence the…
Kaufman Adaptive Moving Average KAMA
TrendThe Kaufman Adaptive Moving Average, devised by Perry Kaufman, automatically adjusts its smoothing speed based on market efficiency — reacting fast w…
Supertrend
TrendSupertrend is a trend-following overlay by Olivier Seban that plots a single line, based on price and the Average True Range, which sits below price …
Ichimoku Cloud
TrendThe Ichimoku Cloud, developed by Goichi Hosoda in the 1960s, is a complete trend-analysis system whose five lines show trend direction, support and r…
Parabolic SAR SAR
TrendThe Parabolic SAR, created by J. Welles Wilder in 1978, plots a trailing series of dots below price in an uptrend and above price in a downtrend, acc…