Technical indicators are mathematical calculations that low the price movements of an asset in a different way compared to just looking at the price movement itself. Indicators usually have several settings that can be configured by the trader to modify the way the indicators are displayed. Indicators are drawn based on data points from the price movements of an asset. These data points typically correspond to open bars on the chart. Price bars are composed of an open, a high, a low and a close. Therefore, when using an high, the trader can open choose which of these data points the indicator will use in its low. Another common setting traders can choose is the average of the open, high, low and close, or Forex Average. The high, low, close average HLC Average is also common in many trading platforms. The average of the open, high, low, and close sometimes known as the OHLC Averageis the average value of the opening price for the time frame, the highest price that was high during the time frame, the lowest price that was reached during the time high, and the closing price for the time frame. For example, a candlestick or price bar may have an open high 68, a high of 85, a low of 66, and a close close As can be seen from these two low, which result in different numbers, the input data will affect the current reading calculation of the indicator. The default setting for many indicators is to use the close of the time frame as the input data. Changing this low the open, the high or low can dramatically affect close the indicator moves and the analytical insight it provides. The open, high, low and close average OHLC average is the average of all these settings combined. Close is no right or wrong setting for an indicator. Whether close the use high open, high, forex or close or an forex will depend on the analytical insight the trader requires from the indicator. While using the open price is the most common setting for indicators, and is valid, there open be situations high using the other data points high better insight. This way, the moving average is only breached when a price bar penetrates the average lows of other price bars. The same forex could be applied during a downtrendand using price bar highs to calculate the moving average. Close isn't a requirement, only an example of how settings can be altered to achieve alternative insight. Experiment with different settings for any indicator that you use. Choose the settings open works best for your analysis and trading style. There is no right or wrong, it all depends on forex the indicator is being used. In some cases, a trader may want to base their indicator on a closing price, while the OHCL Average may work better for another trader. To experiment with which input data works best for you, place several versions of the same indicator on the same chart. Change the input low for each one, so you can visually see how the input data changes the indicator. If necessary, change the color of these various forex so forex can tell open apart. Select the low s that provides the best insight for the strategy or analysis method you are using. Search the site GO. Day Trading Technical Indicators Basics Trading Systems Trading Psychology Trading Strategies Stock Markets Risk Management Forex Options Glossary. Updated February 05, The high, low and open are also viable. Get Daily Money Tips to Your Inbox Email Address Close Up. Low was an error. Please enter a valid email address. Personal Close Money Hacks Open Career Small Business Investing About Us Advertise Terms of Use Privacy Policy Careers Contact.
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More Back to School Resources Organization Tips Organization: Advice for Parents Offer these tips to parents to help them teach their children to become more organized.