Trading Indicators

Definition ∞ Trading indicators are mathematical calculations based on historical price, volume, or open interest data, used to forecast future market direction. These tools, often displayed graphically on charts, help traders identify trends, momentum, volatility, and overbought or oversold conditions. Common examples include Moving Averages, Relative Strength Index, and MACD. They serve as analytical aids to inform entry and exit points for trades.
Context ∞ Crypto news and analysis frequently reference trading indicators when discussing potential price movements and market sentiment for digital assets. Debates often arise regarding the effectiveness of various indicators in highly volatile cryptocurrency markets. Understanding these indicators provides valuable context for interpreting technical analysis presented in financial reports and trader commentary.