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All you wanted to know about leading and lagging indicators in trading

Both indicators have different use in a trading model. It is not easy to follow the price after a leading indicator delivers a trading signal.

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Avdhut Bagkar Mumbai
Technical indicators assist in reading charts which, in turn, facilitate in confirmation of a trend. From the psychological view point, this helps traders develop a feeling of confidence while trading. The deeper knowledge of technical indicators aids in building a trading model that can deliver consistent returns over a period of time. One can then efficiently predict the future outcome of any trading instrument with deeper insights of the technical setup.

Technical indicators are briefly categorized into two spheres: leading and lagging indicators. Leading indicators are those that lead the price movement. On the other hand, lagging indicators always follow

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First Published: Dec 17 2020 | 8:28 AM IST

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