One subject
Indicators
12 lessons and 40 glossary terms cover this across the academy. Each one links to its own page, and nothing is repeated here.
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The curriculum
12 lessons cover this.
In curriculum order, which is the order you would meet them.
- What a moving average isModule 07Reading the chart8 min
- Leading and lagging indicatorsModule 07Reading the chart7 min
- What RSI isModule 07Reading the chart8 min
- What MACD isModule 07Reading the chart8 min
- What the stochastic oscillator isModule 07Reading the chart7 min
- What Bollinger Bands areModule 07Reading the chart8 min
- What ATR isModule 07Reading the chart7 min
- What ADX isModule 07Reading the chart7 min
- What the Ichimoku cloud isModule 07Reading the chart8 min
- What Elliott Wave and harmonic patterns claimModule 07Reading the chart8 min
- Volatility adjusted position sizingModule 09Risk, plan and practice8 min
- Volatility based stop placementModule 09Risk, plan and practice11 min
The glossary
40 terms belong here.
Alphabetical, each defined in one sentence on its own page.
- Advance-decline lineA running total of how many shares rose minus how many fell each session, read as a measure of how broadly an index move is supported.
- Aroon indicatorA pair of lines measuring how recently a price series set its highest high and its lowest low within a lookback window, each scaled between nought and one hundred.
- Average directional index (ADX)An indicator scoring how strongly a market is trending without saying in which direction, built from two directional movement lines and smoothed across a lookback period.
- Average true range (ATR)A measure of how far an instrument typically travels in one period, averaging the true range of recent bars so that gaps between them are counted rather than ignored.
- Awesome oscillatorA momentum histogram plotting the difference between a short and a long simple moving average of each bar's midpoint, so it compares recent momentum against a longer baseline.
- Bollinger BandsA moving average drawn with two bands a chosen number of standard deviations above and below it, so the bands widen when recent closes have been dispersed and narrow when they have been tightly grouped.
- DivergenceDivergence is the case where price makes a further extreme and an indicator computed from that price does not, which technical traditions read as a weakening of the move rather than as a signal to act.
- Donchian channelTwo lines plotting the highest high and the lowest low of a chosen number of past periods, with a midline between them, mapping the range price has occupied.
- Exponential moving average (EMA)An exponential moving average smooths a price series while weighting recent observations more heavily than older ones, so it turns faster than a simple average of the same length.
- Fibonacci extensionA drawing tool that projects levels beyond the end of a completed price swing, at distances set by ratios above one drawn from the Fibonacci sequence.
- Fibonacci retracementA grid of horizontal lines drawn across a completed price swing at fixed proportions of its height, used to measure how far a pullback against that swing has travelled.
- Golden crossA golden cross is recorded when a shorter moving average crosses above a longer one on the same chart, a crossing chart readers conventionally treat as a change of trend.
- Historical volatilityA measure of how much a price actually moved over a past window, calculated as the standard deviation of its returns and usually restated as an annual percentage.
- Ichimoku Kinko HyoIchimoku Kinko Hyo plots five calculated lines and a shaded cloud on one chart, so that trend, support and resistance and momentum are read from a single picture rather than from several separate indicators.
- Implied volatilityImplied volatility is the volatility figure that, fed into an option pricing model, returns the option's traded price, so it states what the market is charging today for movement that has not happened yet.
- Keltner channelA Keltner channel is a pair of bands drawn a chosen multiple of the average true range above and below a moving average, so the channel widens and narrows with volatility.
- Kijun-senKijun-sen is the slower of the two base lines in the Ichimoku system, plotted as the midpoint between the highest high and the lowest low of a longer lookback window.
- Lagging indicatorA lagging indicator reports a change only after it has already occurred, because every value it prints is computed from data that has already been published or prices that have already traded.
- Leading indicatorA leading indicator is one whose changes have historically arrived before the thing it describes, whether that is a turn in the economy or a turn on a price chart.
- MACDMACD tracks the distance between two exponential moving averages of the same price series, plotting that distance, a smoothed version of it, and the gap between the two.
- Mean reversionMean reversion is the proposition that a series tends to return towards a central value after moving away from it, a property some series show and others do not.
- MomentumMomentum measures how fast a price has moved over a chosen lookback, and every momentum indicator is a restatement of prices that have already printed.
- Money flow index (MFI)The money flow index is an oscillator that weights price movement by volume, scoring the balance of buying and selling pressure on a scale from zero to one hundred.
- Moving averageA moving average is the average of a fixed number of recent prices, recalculated on every new bar, which smooths a price series by lagging it.
- OscillatorAn oscillator is an indicator that moves within fixed limits or around a centre line, describing how fast and how far price has moved recently rather than which way the trend runs.
- OverboughtOverbought describes a market that has risen far and fast enough for a bounded oscillator to sit above a conventional threshold, which is a statement about speed rather than about value.
- OversoldOversold describes a market that has fallen far and fast enough for a bounded oscillator to sit below a conventional threshold, which is a statement about speed rather than about value.
- Parabolic SARParabolic SAR prints a trail of dots that follows a directional move and tightens towards price each period, jumping to the other side of the chart once price crosses it.
- Pivot pointA pivot point is a reference level calculated from the previous period's high, low and close, published with a ladder of support and resistance levels derived from the same three numbers.
- Relative strength index (RSI)The relative strength index compares the average size of a market's recent gains with the average size of its recent losses and reports the comparison on a bounded scale from zero to one hundred.
- Simple moving average (SMA)A simple moving average is the mean of a fixed number of recent closing prices, recalculated as each new period ends, which smooths a series by giving every price in the window equal weight.
- Standard deviationStandard deviation measures how far a set of values sits from its own mean on average, expressed in the same units as the values themselves, which is why it can be added to and subtracted from a price.
- Stochastic oscillatorThe stochastic oscillator plots where the latest close sits inside the high to low range of a chosen lookback, on a scale from zero to one hundred, with a smoothed signal line drawn across it.
- Technical analysisTechnical analysis studies the record of past prices and volume for recurring structure, on the working premise that everything known about a market is already expressed in what it has traded at.
- Tenkan-senTenkan-sen is the faster of the two base lines in the Ichimoku system, plotted as the midpoint between the highest high and the lowest low of a short lookback window.
- True rangeTrue range is the largest of three distances measured on a single bar, the bar's own high to low, and each of its extremes to the previous close, so a gap between bars is counted rather than lost.
- VegaVega measures how much an option's price changes when the volatility implied by the market rises or falls by one percentage point, with everything else about the option held still.
- VolatilityVolatility measures how widely a price has moved around its own average over a period, counting moves in both directions equally and saying nothing about which way the next one goes.
- Williams %RWilliams %R reports where a period's close sits inside the high to low range of a chosen lookback, on an inverted scale reading zero at the top and minus one hundred at the bottom.
- Zig zag indicatorThe zig zag indicator connects successive swing highs and lows with straight lines, ignoring every move smaller than a stated threshold, so only the larger turns remain on the chart.
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