Forex Dictionary Terms

Trend Indicators

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Definition – What does Trend Indicators mean?

Trend indicators are a collection of mathematically derived technical analysis tools that are used to summarize the past and current direction of price action. Once a forex trader knows the current direction, he can make assumptions about the future price action of the currency pair he is trading. Simply put, trend indicators help currency traders figure out what the prevailing trend is so that they can trade it.

ForexTerms explains Trend Indicators

There are many different trend indicators including the various moving averages, the heiken-ashi from ichimoku charts, the parabolic SAR and so on. Trend indicators essentially take price action for the timeframe being studied and use it to calculate some visual representation of the trend according to the calculation. The visual representation of the trend indicator, usually a line or dots, is projected on a currency trader’s chart and updated as new price action data is added in real time.

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