What Is an Indicator?

Indicators are statistics used to measure cur♛♛rent conditions as well as to forecast financial or economic trends.

In the world of investing, indicators typically refer to 澳洲幸运5官方开奖结果体彩网:technical chart patterns deriving from the price, volume, or open interest of a given security. Common technical indicators include moving averages, moving 🐭average convergence divergence (MACD), relative strength index (RSI), and on-balance-volume (OBV).

In economics, indicators usually refer t♎o pieces of economic datᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚa used to measure the overall health of the economy and predict its direction. They include the Consumer Price Index (CPI), Gross Domestic Product (GDP), and unemployment figures.

Understanding Indicators

Indicators can be broadly categorized into economiღc indicators and technical indicators.

澳洲幸运5官方开奖结果体彩网:Economic indicators are statistical metrics used to measure the growth or contraction of the economy as a whole or sectors within the economy. In 澳洲幸运5官方开奖结果体彩网:fundamental analysis, economℱic indicators that quantify current economic and industry conditions are used to provide insight into the future profitability potential of public co🎐mpanies.

澳洲幸运5官方开奖结果体彩网:Technical indicators are used extensively in 澳洲幸运5官方开奖结果体彩网:technical analysis to pre🧔dict chang༒es in stock trends or price patterns in any traded asset.

Economic Indicators

There are many economic indicators created by 𝔉differen✤t sources in both the private and public sectors.

For example, the 澳洲幸运5官方开奖结果体彩网:Bureau of Labor Statistics, which is the research arm of the U.S. Department of Labor, compiles data on prices, employment and unemployment, compensation and work conditions, and productivity. The price report contains information about 澳洲幸运5官方开奖结果体彩网:inflation, import and export ♈prices, and consumer spending.

The 澳洲幸运5官方开奖结果体彩网:Institute for Supply𝐆 Management (ISM) is a not-for-profit professional association for sup🌞ply management and p🀅urchasing professionals.

It has published its monthly since 1931. The report contains a composite index, the 澳洲幸运5官方开奖结果体彩网:Purchasing Managers' Index (PMI), which contains information🎀 on manufacturing and non-manufacturing orders. The index is a closely watched barometer of economic activity.

The U.S. 澳洲幸运5官方开奖结果体彩网:Department of Commerce uses ISM data in its evaluation of the economy.

For most of the 21st century, housing and real estate have been leading economic indicators. There are several metrics used to measure housing growth including the 澳洲幸运5官方开奖结果体彩网:S&P/Case-Shiller Index, which measures house sale prices, and the 澳洲幸运5官方开奖结果体彩网:NAHB/Wells ෴Fargo Housing Market Index, ܫwhich is a survey of home builders that measures the market appetite꧙ for new homes.

Other economic indicators include interest rates, the 澳洲幸运5官方开奖结果体彩网:money supply, and 澳洲幸运5官方开奖结果体彩网:consumer sentiment.

Technical Indicators

In the context of technical analysis, an indicator is a mathematical calculation based on a security's price or volume. The result is used to predict future prices.

Common technical analysis indicators are the 澳洲🎃幸运5官方开奖结果体彩网:🦋moving average convergence-divergence (MACD) indicator and the 澳洲幸运5官方开奖结果体彩网:relative strength index (RSI).

The MACD is based on the assumption that the tendency of the price of a traded asset is to revert to a 澳洲幸运5官方开奖结果体彩网:trend line.

The RSI compares the size of recent gains to recent losses to determine the asset's price momentum, either up or down. Using tools like the MACD and the🐲 RSI, technical tra♔ders will analyze assets' price charts looking for patterns that will indicate when to buy or sell the asset under consideration.

Examples of Indicators

Consumer Price Index (CPI)

One of the most common economic indicators is the Consumer Price Index (CPI), which is simply thཧe weighted price average of a basket of consumer goods and services. Changes in CPI are used to measure changes in the cost of living and to identify periods of inflation or def♏lation.

At the time of writing (Summer 2021), investors are becoming increasingly concerned that rising inflation will finally upend the bull run in the stock market. In April 2021, the CPI increased 0.8%, making it the biggest 12-month increase since September 2008.

Moving Average (MA)

Moving average (MA) is a technical indicator used to identify the general direction, or trend, of a given stock. 𓆉Its purpose is to smoothen historical price data by generating a constantlyꦬ updated average price.

If the MA is moving in a positive (negative) direction, that's a bullish (bearish) sign for the stock.

At the time of writing, Amazon stock recently , suggesting that itꦑ's an attractive pick from a technical standpoint.

Indicator FAQs

ಌ What Is a Common Indicator of a Phishing Attempt?

Emails that are completely unsolicited, contain several typos, require🌞 urgent action, and demand unusual actions from you are all indicators of a phishing attempt.

What Economic Indicator Describes 💙Generally Declining Prices🙈?

A steadily declining❀ CPI is an indicator of generally declining prices.

What Is a Key Performance Indicator?

A key performance indicator refers to a quantifiable measurement used to measure a company's success against a specific target or objective. Common KPIs include net profit, sales, and customer retention rate.

What Is an RSI Indicator?

The relative strength index (RSI) is a technical analysis indicator that compares the size of recent gains to recent losses. RSI is used to determine the asset's price momentum, either up or down.

What Is the Genuine Progress Indicator?

澳洲幸运5官方开奖结果体彩网:Genuine progress indicator (GPI) is a metric used to gauge a 𓆉country's rate ൲of economic growth. It is often considered a more reliable measure of economic progress than the more widely used gross domestic product (GDP) figure.

What Are Indicators of a Company's Profitability?

Commonly used indicators of a company's profitability include gross margin, operating margin, net margin, and return on equity (ROE).