What is a leading indicator in trading?

A leading indicator is a technical analysis tool that aims to predict future price movements based on current or past price data. Unlike lagging indicators, which confirm trends, leading indicators provide early signals of potential trends or reversals.

How does a leading indicator work?

Leading indicators work by analyzing price movements, volume, and other market data to generate signals that predict future price action. Traders use them to anticipate market movements and make decisions before the trend becomes fully established.

What are some examples of leading indicators?

Some common leading indicators include the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and the Stochastic Oscillator. These indicators are used to identify overbought or oversold conditions and predict future price movements.

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What is LEADING INDICATOR?

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