Technical indicators explained

FreeCharting includes 27 technical indicators, and you can add as many as you like to one chart. Click Indicators in the toolbar, then tick the ones you want: trend indicators appear on the price chart, and oscillators and volume indicators get their own pane below it. The numbers in brackets are the default settings FreeCharting uses.

Trend indicators

Trend indicators smooth out price noise so the overall direction is easier to see.

MA · Moving Average (5, 10, 30, 60)

The average closing price over the last N bars. Four lines (5, 10, 30 and 60 periods) show short- and long-term trend at once. When faster averages sit above slower ones, the trend is up.

EMA · Exponential Moving Average (6, 12, 20)

Like a moving average, but it weights recent prices more heavily, so it reacts faster to new moves.

SMA · Smoothed Moving Average (12, 2)

A heavily smoothed average that filters out short-term swings, useful for spotting the underlying trend.

BOLL · Bollinger Bands (20, 2)

A 20-period moving average with bands two standard deviations above and below. The bands widen in volatile markets and narrow ("squeeze") in quiet ones, which often comes before a breakout.

SAR · Parabolic SAR (2, 2, 20)

Dots above or below price that trail the trend. When price crosses the dots, they flip sides, which traders use as a trend-reversal or trailing-stop signal.

BBI · Bull and Bear Index (3, 6, 12, 24)

The average of four moving averages (3, 6, 12 and 24 periods) combined into one line. Price above BBI suggests bulls are in control.

DMA · Difference of Moving Averages (10, 50, 10)

The gap between a 10- and 50-period moving average, plus its own average. Rising DMA means the short-term trend is pulling away from the long-term one.

TRIX · Triple Exponential Average (12, 9)

The rate of change of a triple-smoothed EMA. The heavy smoothing removes minor wiggles, so crossings of zero or of its signal line highlight bigger trend shifts.

DMI · Directional Movement Index (14, 6)

Compares upward and downward movement (+DI and −DI) and adds ADX to measure how strong the trend is, whatever its direction.

Momentum oscillators

Oscillators measure the speed of price moves and help spot overbought or oversold conditions.

MACD · Moving Average Convergence Divergence (12, 26, 9)

The difference between a 12- and 26-period EMA, a 9-period signal line, and a histogram of the gap between them. Signal-line crossovers and divergences from price are classic momentum signals.

RSI · Relative Strength Index (6, 12, 24)

Compares recent gains with recent losses on a 0–100 scale. Readings above 70 are often called overbought and below 30 oversold. FreeCharting shows three lookback periods at once.

KDJ · Stochastic (KDJ) (9, 3, 3)

A stochastic oscillator that shows where the close sits within the recent high–low range, with an extra J line that leads K and D. Crosses of K and D are common entry signals.

CCI · Commodity Channel Index (20)

Measures how far price has moved from its average, scaled so most readings fall between −100 and +100. Moves beyond that range signal unusual strength or weakness.

WR · Williams %R (6, 10, 14)

Shows where the close sits relative to the recent high, from 0 to −100. It’s similar to the stochastic oscillator, read upside-down.

ROC · Rate of Change (12, 6)

The percentage change in price over N bars. Crossing above zero means price is higher than it was N bars ago.

MTM · Momentum (12, 6)

The raw price difference between now and N bars ago, with a moving average. A simple way to see whether moves are speeding up or slowing down.

AO · Awesome Oscillator (5, 34)

The difference between a 5- and 34-period average of each bar’s midpoint, drawn as a histogram. Colour changes and zero-line crosses show shifting momentum.

BIAS · Bias Ratio (6, 12, 24)

How far, in percent, the price is from its moving average. Extreme readings suggest price has stretched too far and may snap back.

PSY · Psychological Line (12, 6)

The share of the last N bars that closed higher. It’s a simple gauge of market mood: very high readings suggest optimism, very low ones pessimism.

Volume indicators

Volume indicators show whether money is flowing in or out, which helps confirm price moves.

VOL · Volume (5, 10, 20)

Traded volume for each bar, coloured by direction, with 5-, 10- and 20-period averages. Big moves on above-average volume are generally more trustworthy.

OBV · On-Balance Volume (30)

A running total that adds volume on up bars and subtracts it on down bars. When OBV rises while price is flat, buyers may be quietly accumulating.

PVT · Price and Volume Trend

Similar to OBV, but adds volume in proportion to the percentage price change, so bigger moves count for more.

VR · Volume Ratio (26, 6)

Compares volume on up days with volume on down days. High readings mean buying volume dominates.

EMV · Ease of Movement (14, 9)

Relates price change to volume. High values mean price is moving up easily on light volume; low values mean it takes heavy volume to move.

AVP · Average Price

The volume-weighted average price over the loaded data, drawn on the price chart. Price above it means buyers have paid up on average.

Sentiment indicators

Two classic sentiment gauges, popular in Asian markets, that compare buying and selling pressure.

BRAR · Sentiment (BRAR) (26)

AR compares each bar’s high and low with its open; BR compares them with the previous close. Together they show how eager buyers and sellers are.

CR · Energy (CR) (26, 10, 20, 40, 60)

Compares each bar’s high and low with the previous bar’s midpoint to gauge buying energy, with four moving averages for context.

How to combine indicators

Indicators that measure the same thing tend to agree with each other, so stacking five momentum oscillators adds little. A common approach is to pair one indicator from each group: a trend tool to find direction (a moving average), a momentum tool to time entries (RSI or MACD), and volume to confirm the move. No indicator predicts the future; they describe what price has already done.

Frequently asked questions