Today I thought I would just quickly go over a few classifications of indicators that are commonly used in trading with the 4xCharts and the ForeXecutor.
The first classifications I want to discuss are “Overlay” and “Under the Line” indicators.

Overlay Indicators are simply indicators that lay on top of the price bars or line. Examples of these would be Moving Averages, Parabolic SAR and the Ichimoku Cloud. Under the line indicators are those that lie under price information, such as the RSI, GaP and MACD.

The next two classifications are Lagging and Predictive indicators. Lagging indicators are indicators based on information from the past that show where price was at. The best example of a lagging indicator is the Moving Average. Moving Averages are just a smoothed representation of the bars closing prices. A Leading or Predictive indicator tries to place value on where the price may go in the future. A nice example of the predictive nature of indicators is the MACD from above. Look at the chart below. You will notice that the MACD actually crosses before the moving average does. This is part of the way that the MACD is predictive. However it still isn’t always right, because it incorporates information from moving averages.

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