Indicators display information on a price chart. The most common definition of an indicator is a mathematical formula that returns a number for every bar on a chart, with its resulting value displayed as a line, histogram, or series of points.
They are generally made up of one or more plot lines that display the results of technical analysis based transformation(s) of securities data. In other words, calculating and displaying a moving average would be one example of an indicator. Most of the well-known analysis techniques, such as MACD, Stochastics and RSI, fall in this category.
The following functionality can be incorporated when creating indicators:
ALERTS: Indicators can include user-defined rules to issue real-time desktop alerts and pager alerts. Typically, an indicator is programmed to issue an alert at the occurrence of a discrete event, such as the crossing of two plot lines.
PLOT ATTRIBUTES: The attributes of each of the plots of an indicator can be controlled independently and include:
Displacement: With displacement the plot can be positioned either forward or backward by a certain number of bars relative to its intrinsic location on the chart.
 EasyLanguage Example:
The following chart shows how displacement is used in the Bollinger Band indicator. In this case we have used displacement to narrow the bands. |
 |
| How displacement is used in the Bollinger Band indicator. |
|
|
Conditional Coloring:
With conditional coloring, the color of the plot can be set to change when a certain condition is met.
EasyLanguage Example:
The following chart shows the conditional coloring code used in the RSI indicator.
 |
| Conditional coloring code used in the RSI indicator. |
Conditional Width:
Conditional width works the same way as conditional coloring except instead of changing the color of the plot when a certain condition is met, the width of the plot is changed. Usually, though, the width is set at a fixed value via the indicator’s property settings.
Plot Type & Line Style:
Multiple plot types (e.g., Line, Histogram, Point, Cross, Bar, High, Bar Low, Left Tick, Right Tick) are available as well as multiple line styles (e.g., solid, dashed, dotted) that can be set as the default. The program also allows for these to be changed by the end-user. A line plot, for example, could easily be converted to a histogram, or a solid line could be changed to dashes.
COMMENTARY:
Indicators can also include code for generating analysis commentary based on the author’s interpretation of the indicator configuration at any bar on a securities chart. |
