Indicators are algorithms allowing traders to receive data on future prices based on quotes data for a certain period.
Each technical analysis indicator is based on a specific formula. The formula helps make the calculations that are later transformed into lines, charts, and other graphic elements. With these elements, traders can analyze current prices and make forecasts. The formula can vary depending on the type of indicator or its purpose. For example, one formula calculates average prices for a certain period; another calculates market closing or opening prices, and so on.