What is lag?Lag
Because indicators are built from past prices, their signals always come after the actual turn in price.
Learn “lag” in an animated lesson
- Indicators in Practice & BacktestingLag and False Signals
Every indicator based on past prices lags, and in a ranging market the signals will whipsaw you again and again.
- Trend IndicatorsExponential Moving Average (EMA)
An EMA gives more weight to recent prices, so it turns faster than an SMA.
- Trend IndicatorsMA Alignment: Bullish, Bearish and Tangled
Moving averages stacked from shortest at the top to longest at the bottom is a bullish alignment, the reverse is bearish, and when they're twisted together it's a tangle.
- Trend IndicatorsMoving Average Crossovers: Golden and Death Crosses
A short-term average crossing above a long-term one is a golden cross; crossing below is a death cross. The most classic trend signal there is.
- Trend IndicatorsMACD
The MACD line (DIF), the signal line (DEA) and the histogram: using the gap between two EMAs to measure the direction and strength of a trend.
- Trend IndicatorsSimple Moving Average (SMA)
Average the last N closing prices and draw them as a smooth line that filters out day-to-day noise.
Related terms
See how “lag” works for yourself with an animation you can drag and play.
Go to “Lag and False Signals”