Fundamental analysis takes its turn?

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Benjamin Graham? David Dodd? Warren Buffett?

Popularized in 1934 in their book “Security Analysis”, later championed by Buffett, established fundamentals as a cornerstone for value investing

Fundamental analysis is the way traders analyze factors other than price action, to examine an asset’s “real value”.

The end goal?

To help them predict the influence of these factors on future price moves
To uncover if an asset is traded fairly, compared to its true value

Instead of looking at charts and historical prices, fundamental analysts look at external events and real-world factors like politics, geopolitics, economic indicators, industry trends, as well as the financial statements of companies.

Fundamental analysis has multiple benefits

and multiple limitations

Cuts through the noise

Stops reactions on every tick, due to wider narratives

Medium-long term vision

Prices do their thing, fundamental keeps us grounded

Deeper understanding

Reveals why assets move, reduces emotional decisions

Lagging data

Released periodically, prices move before data speak

Unpredictability

Politics, corporate news, scandals, weather, economics

Complexity

Too many things to look into, learning can get complex

Understanding the intrinsic value

What does an asset represent

An asset is an investment that provides its holder with management power and control. The asset as a store of value represents ownership, operational interests and influence.

Based on these, an estimate of its true worth can be calculated. Its intrinsic value.

Fundamental analysis looks to identify the intrinsic value after taking into consideration future cash flows, earnings reports, financial statements, and assessing the asset’s growth potential.

Independence from the price

All these factors, are independent from its current market price. Sounds like the opposite of technical analysis, right?

That’s true, since technical analysis assumes that all factors, are already reflected in the price.

Traders look for moments when the market price drifts away from its intrinsic value. The result reveals opportunities but also signals increased risk.

When calculating the intrinsic value

one of three results is derived:

The asset is overvalued

Market price > Intrinsic value

The asset is undervalued

Market price < Intrinsic value

The asset is traded fairly

Market price close to Intrinsic value

Very important to remember

Intrinsic value is not an exact science.

It uses assumptions and estimates about the future in the calculations. This means that the result is subjective, and multiple analysts might come up with different results.

We’re only human

here’s how the human element, justifies the logic

Wishful: markets are perfectly efficient

prices would then reflect all available information like technical analysis assumes

Reality: markets are driven by people

Emotional, impatient, misinformed, overly optimistic, greedy, panicked people

The human element

Drives sentiment, overreacts to news, or drags its feet on important information. Gaps increase between perceived and real value allowing traders to capitalize on human emotions

The expectation?

The market will eventually correct and return to its real value. Fundamental analysis helps position/ prepare for that

New to trading?

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Start with the basics here

Fundamental analysis can be applied on any asset

With stocks, it can be conducted in two ways

Top-down fundamental analysis

Taking the bigger picture first, a broader view of the economy before narrowing it down to a specific company.

Bottom-up fundamental analysis

Taking a company’s financial metrics, and broadening out to exogenous factors that could affect the price.

Quantitative?

Qualitative?

or both?

fundamental factors distinguished by measure

Quantitative = asset metrics

Asset metrics = market cap, financial statements, ROIs, macro indicators, ratios for price/liquidity, efficiency, leverage, competitor metrics

Qualitative = status elements

Status elements = governance, management, compliance, brand recognition, reviews, news, ESG, innovation, business model, competition

Basic economic principles

The core of an economy

Supply and Demand

When markets (people) want a product or service, they buy. The more they buy, the more demand they create. As demand increases on the same supply numbers, so does the price.

When markets (people) don’t want as much a product or service, they don’t buy. The less they buy, the less demand they create. As demand lowers on the same supply numbers, so does the price.

Equilibrium occurs when demand meets supply. The shifts are dynamic, pushing the equilibrium up or down to meet the current market conditions.

Important: Real markets are not that accurate. Expectations, sentiment, speculation, can change these forces.

For example: oil prices can spike because traders think supply might tighten due to geopolitics or other reasons. Supply though in this example, remained unchanged.

Inflation and deflation

Inflation is the result of an overheating economy or extreme conditions like intense geopolitics, wars and pandemics. These are all events we witnessed first hand in our life time with the COVID 19 pandemic and the war in Ukraine.

When the price of goods and services increases in the context of supply and demand, inflation is tamed. But when it runs away (runaway inflation) past the mark of 2%, inflation can become a problem.

Disinflation occurs when inflated prices of goods and services, are in a decreasing mode.

Deflation occurs when inflation turns negative (drops below 0). Also an extreme condition, because the 2% inflation level is needed for company margins and economic growth.

Inflation erodes salaries, profits and buying power. Left unchecked, people’s standards of living are becoming fragile, and spilling over into other parts of the economy.

The mandate of central banks is to maintain high employment, with an inflation target of 2%. But, high employment means people have spending power which counteracts the inflation measures.

A balance must be achieved to start the disinflation process, without damaging employment.

Economic cycles

Economies like anything else organically structured, move in cycles. These cycles are more prominent during times of crisis, which we all know as recessions. Periods of extreme recessions, lead to depressions like in the case of the 1930s.

The four main cycles are expansion, peak, contraction and trough.

Expansion: economies are thriving, businesses grow, full employment, spending increases

Peak: growth is still present but hits a limit, economies overheat, inflation rises, credit tightens

Contraction: credit tightens more, activity slows, risky assets decline, companies cut costs

Trough: inflation is controlled, credit slowly increases, there’s pessimism but also opportunities

Traders look for these cycles, but also the transitions. Indicators can help with this, like consumer spending, market sentiment, manufacturing data, interest rate policies.

Transition examples

Late expansion: Defensive sectors and commodities often strengthen.

Early contraction: Safe-haven assets and bond markets attract attention.

Trough phase: Growth stocks and risk assets begin to recover before the economy fully does.

Early expansion: Cyclical sectors like tech, consumer goods, and industrials start gaining traction.

Central Bank policies

Central Bank policies

Central Banks manage a country’s monetary system. More than that though, their responsibility is to keep the economic cycles in check. The case of the 1930’s depression was an extreme case, that showed that without intervention, these cycles can spiral out of control.

Keynesian economics started a “global government movement”, that enforced mandates to control inflation and unemployment, in order to stabilize the financial system, guide growth and put a brake on recessions. All by controlling money supply in an economy.

The markets respond to these government policies, but also in the central bank’s remarks on how they see these playing out in the near future (forward guidance).

The policies:

Quantitative Easing (QE): Opening access to money, by lowering interest rates to make credit affordable. At the same time, they directly inject money, via the purchase of financial assets.

Quantitative Tightening (QT): Restriction of access to money, by increasing interest rates to make money expensive. They remove money from the economy, via the sale of financial assets.

Important note:

Both QE and QT can be tamed or aggressive. Traders don’t just hear QE or QT and respond. They watch the pace with which governments apply the policies in line with other factors.

Forward guidance: After their meeting, central banks publicise the decision making process and what numbers affected these decisions. They also hint, how they see future policy playing out.

Markets are more inclined to move strongly on future pricing, than the present. The idea is that the present is already somewhat reflected, but hints of the future are still a fair game.

Fundamental Indicators

Macroeconomics

The world is in constant motion. Nothing stays the same for long. The more in tune we are with the world, conflicts, partnerships at country level, country economics, bank policies, goods/services price levels, the better we can respond to asset price changes.

Key areas of macroeconomic study:

Economic growth. Examining areas that increase or decrease a country’s output.

Inflation and price levels. Examining why prices increase or decrease in a system.

Unemployment. Examining why it rises or falls within the entire economy.

International trade. Examining trade balances, exchange rates and geo-partnerships.

Economic cycles. Recessions, expansions, peaks and troughs.

Government and Central Bank. Monetary and fiscal policies that control money supply.

An economic calendar is a schedule of important financial events, that acts as a financial alert system. All important announcements are listed by date/time, and includes previous, forecasts and actual numbers upon release.

Bigger moves are expected, when the released numbers deviate a lot from the expected forecast.

Most important macro indicators

Classified by leading/lagging, importance score, definition, formula, key trader considerations

Gross Domestic Product (GDP)

Type: Lagging

Importance Score: 10

Release Timing: Quarterly, 1–2 months after period end

Gross Domestic Product (GDP) is the broadest measure of economic activity and represents the total value of all goods and services produced within a country over a specific period, usually quarterly or annually. Traders watch GDP because it reflects the overall economic health of a nation and influences expectations of interest rates, corporate earnings, currency strength, and capital flows.

Definition

GDP measures the size and growth rate of an economy. A rising GDP suggests expansion, increasing demand, job creation, and business confidence.

Falling GDP signals slower activity, recession risk, or weakening consumption.

Formulas:

GDP is measured in three primary ways:

Expenditure Approach | GDP = C + I + G + (X-M)

Where:

C = Consumption
I = Investment
G = Government Spending
X – M = Net Export

Income Approach | GDP = Wages + Rent + Interest + Profits

Value Added Approach | GDP = Sum (Value Added)

Why It Matters to Traders

GDP reports can create immediate volatility in currencies, stock indexes, government bonds, and commodities, especially when the actual numbers differ from expectations.

Currencies: Strong GDP usually strengthens the domestic currency.
Equities: A healthy GDP boosts earnings expectations and equity demand.
Bonds: Strong GDP can push yields higher due to inflation and rate expectations.
Commodities: Solid growth supports oil, industrial metals, and energy demand.

GDP is a lagging indicator, but it significantly shapes long-term macro trends, making it one of the most important global indicators.

Consumer Price Index (CPI)

Type: Lagging

Importance Score: 10

Release Timing: Monthly, mid-month

The Consumer Price Index (CPI) measures inflation by tracking changes in the prices of a basket of goods and services that households purchase. It is one of the most market-moving indicators globally because inflation directly affects central bank policy, consumer buying power, corporate profitability, and currency value.

Definition

CPI shows how much the general cost of living has increased or decreased over time. Higher CPI means prices are rising; lower CPI suggests inflation is cooling.

Central banks use CPI as a primary benchmark for setting interest rates.

Formula

CPI = (Basket cost in current period / basket cost in base period) x 100

Inflation Rate (YoY):

Inflation = [ (CPI_t– CPI_t-12) / CPI_t-12] x 100

Related Indicators

PPI (producer inflation feeds into consumer inflation)
Wage growth
Import/Export prices
Energy prices

Why It Matters

CPI drives interest rate decisions. When inflation rises above central bank targets (often 2%), policymakers may raise rates to cool the economy.

When CPI falls, they may cut rates to stimulate activity.

Market reactions often include:

Currencies: Higher CPI, stronger currency due to rate hike expectations
Stocks: High inflation may depress equities; low inflation supports growth sectors
Bonds: CPI spikes raise yields; falling CPI supports bond prices
Commodities: Inflation typically boosts gold and real assets

CPI surprises (numbers significantly above or below forecasts) cause major intraday volatility.

Producer Price Index (PPI)

Type: Leading
Importance Score: 8

Release Timing: Monthly, mid-month

The Producer Price Index measures the average change in prices received by domestic producers for their output (manufacturing inflation). It is considered a leading indicator because changes in producer prices often translate into later changes in consumer prices.

Definition

PPI shows inflationary pressures in the early stages of production. If factory and wholesale prices rise, companies may eventually pass those costs to consumers, raising CPI.

Formula

[ ASP (current period) / ASP (base period) ] x 100

Where ASP = Average Selling Price

Related Indicators

CPI (directly influenced by PPI trends)
PMI manufacturing price components
Import/export price indices
Wage inflation

Why PPI Matters

Currency markets: Rising PPI can strengthen a currency if it signals future inflation and rate hikes.
Equities: High PPI pressures profit margins, hurting manufacturing-heavy sectors.
Bonds: Higher PPI leads to expectations of higher CPI therefore higher yields.
Commodities: PPI often rises with commodity booms (oil, metals).

PPI doesn’t move markets as sharply as CPI but is important for predicting inflationary trajectories.

Unemployment Rate

Type: Lagging
Importance Score: 10

Release Timing: Monthly, early in month

The unemployment rate measures the percentage of the labor force that is jobless and actively seeking work. Labor market strength is essential for understanding consumer demand, inflation pressure, economic growth, and central bank policy.

Definition

A low unemployment rate suggests a tight labor market. This leads to increased wage pressures, companies struggle to fill roles, and inflation may rise. High unemployment signals weakness, low consumer spending, and recession risk.

Formula

( Unemployed workers / labor force ) x 100

Related Indicators

Non-Farm Payrolls (NFP)
Participation rate
Wage growth
Job openings
PMI employment components

Why It Matters

Employment is the backbone of economic growth. Central banks monitor labor market strength closely when determining interest rate paths:

Strong labor can lead to an overheated economy and potential rate hikes
Weak labor signals a cooling economy and potential rate cuts

Market reactions:

FX: Strong labor, stronger currency
Stocks: Strong labor, cyclical sector boost
Bonds: Strong labor, yields rise on inflation expectations
Gold: Weak labor, gold rises as safe haven

The unemployment rate has enormous long-term importance.

Non-Farm Payrolls (NFP)

Type: Leading
Importance Score: 10

Release Timing: Monthly, first Friday

Although specific to the U.S., NFP is one of the most watched indicators in global markets because the U.S. dollar is the world’s reserve currency.

NFP measures monthly changes in employment excluding farms, government, nonprofits, and private households.

Definition

NFP reveals hiring trends, wage pressure, labor demand, and economic momentum. It is often the most volatile major economic release and can generate massive intraday market reactions.

Formula

Reported directly as net jobs added.

NFP Change = Total Non-Farm Jobs_t – Total Non-Farm Jobs_t-1

Wage growth uses:

Wage Growth (YoY) = [ (W_t – W_t-12) / W_t-12] × 100

Related Indicators

Unemployment rate
Average hourly earnings
Labor force participation rate
JOLTS job openings
ADP employment report

Why It Matters

NFP affects:

Currencies: Huge moves in USD pairs occur within seconds
Stocks: Strong NFP boosts risk sentiment; too strong raises rate fears
Bonds: Strong jobs lead to higher yields
Gold: Often reacts inversely to USD

Traders consider NFP a “super-indicator” due to its immediate global impact.

Purchasing Managers Index (PMI)

Type: Leading
Importance Score: 9

The Purchasing Managers Index (PMI) is one of the most influential leading indicators for forecasting economic activity because it measures conditions directly from business managers responsible for ordering materials, hiring staff, and planning production.

PMI surveys cover manufacturing and services sectors. Together they represent most of global GDP. The index gives an early signal of expansion, contraction, supply chain stress, demand strength, and price pressures.

Definition

PMI is a diffusion index ranging from 0 to 100:

>50 signals expansion
<50 signals contraction
=50 signals no change

The index summarizes:

New orders
Output
Employment
Inventories
Supplier delivery times
Price trends

Formula

PMI is not a mathematically pure formula but a weighted diffusion index:

PMI = (P₁ × W₁) + (P₂×W₂) + … + (P_n × W_n)

Where

P = percentage of respondents reporting improvement

W = weight of each component.

Related Indicators

Industrial production
GDP (PMI predicts GDP movements 1–3 months ahead)
PPI and CPI (price input/output components)
Employment reports
Business confidence indices

Why It Matters to Traders

PMI often moves markets immediately because it is one of the earliest monthly indicators.

FX: Stronger PMI strengthens the domestic currency.
Stocks: strong PMI boosts cyclical stocks; weak PMI lifts defensive sectors.
Bonds: Weak PMI supports bond markets as growth expectations fall.
Commodities: PMI correlates with industrial metals and energy demand.

Because PMI is forward-looking, traders treat it as one of the most reliable early-warning signals for recessions or expansions.

Retail Sales

Type: Leading
Importance Score: 9

Retail Sales measures the total value of goods sold by retailers and is a major indicator of consumer spending. It is often the largest component of GDP in developed nations.

Because households drive most economic activity, Retail Sales is a powerful gauge of demand strength and future economic momentum.

Definition

Retail Sales represent broad consumer demand across categories like clothing, electronics, groceries, and online sales.

Rising retail sales suggest healthy consumption, job security, and income stability.
Falling retail sales imply weakening consumer confidence and slower economic growth ahead.

Formula

Reported as percentage changes (MoM and YoY):

Retail Sales Change = [ (RS_t – RS_t-1) / RS_t-1] × 100

Where RS = retail spending

Related Indicators

Consumer confidence
GDP (consumption component)
Inflation (CPI)
Employment and wages
Personal income

Why It Matters to Traders

Retail Sales tends to create short-term volatility due to its strong relationship with GDP.

FX: Higher retail sales boost the currency.
Equities: Consumer discretionary stocks respond strongly; weak data benefits defensive sectors.
Bonds: Strong retail sales reduce bond prices due to inflation/interest rate expectations.
Commodities: Higher consumption supports oil and energy demand.

Retail Sales is especially powerful when it diverges sharply from expectations, making it a central release on most economic calendars.

Industrial Production

Type: Coincident
Importance Score: 8

Industrial Production measures the output of factories, utilities, and mining operations. It captures real activity in the production economy. This is one of the earliest places to see economic slowdowns or accelerations.

Because manufacturing sits upstream from retail, trade, and services, changes in industrial production often ripple into other economic sectors.

Definition

Industrial Production tracks physical output, not revenue. It measures how much is produced relative to the previous month, providing a direct gauge of economic momentum in manufacturing, energy consumption, and mining.

Formula

Industrial Production Change = [ (IP_t – IP_t-1) / IP_t-1 ] × 100

Related Indicators

PMI Manufacturing
Capacity utilization
Factory orders
Export data
Commodity prices

Why It Matters to Traders

Although manufacturing is smaller than services in developed nations, it remains central in global supply chains.

FX: Strong output strengthens the currency, especially for export-heavy countries (Germany, Japan, South Korea).
Equities: Industrial, material, and energy stocks react sharply.
Bonds: Rising production raises inflation expectations.
Commodities: Oil, copper, and other industrial metals respond heavily.

Industrial Production is particularly important in cyclical economies and is a reliable indicator of economic turning points.

Trade Balance (Exports – Imports)

Type: Lagging
Importance Score: 8

Release Timing: Monthly, mid-month

The Trade Balance measures the difference between a country’s exports and imports. A surplus occurs when exports exceed imports; a deficit occurs when imports exceed exports.

This indicator is fundamental to currency valuation because it reflects foreign demand for a country’s goods, services, and currency.

Definition

A positive trade balance (surplus) strengthens the currency as foreign buyers must purchase it to pay for exports. A negative balance (deficit) may weaken the currency because more domestic currency is sold to buy foreign goods.

Formula

Trade Balance = X – M

Where:

X = exports
M = imports

Related Indicators

Current account
Exchange rates
Industrial production
GDP (net exports component)
PMI export orders

Why It Matters to Traders

Trade Balance heavily influences foreign exchange markets:

Surpluses strengthen currencies (e.g., CHF, JPY).
Deficits weaken currencies (e.g., often USD).

It also influences stock markets. Strong exports benefit industrials, autos, technology, and resource companies.

Commodities are also sensitive:

Oil importers see trade deficits worsen as oil prices rise.
Commodity exporters benefit from high commodity prices.

Although lagging, the Trade Balance helps traders understand economic competitiveness, currency strength, and global capital flows.

Current Account Balance

Type: Lagging
Importance Score: 8

Release Timing: Quarterly, 1–2 months after period end

The Current Account measures a country’s trade in goods and services, net income flows (interest, dividends), and transfer payments. It provides a comprehensive view of a nation’s financial interactions with the world and reflects whether a country is a net lender or borrower globally.

Definition

A current account surplus means a country saves more than it invests domestically, while a deficit means it imports more goods, services, or capital than it exports.

Formula

Current Account = ( Exports – Imports) + Net Income + Transfers

Related Indicators

Trade balance
Capital flows
Exchange rates
Foreign reserves
GDP

Why It Matters to Traders

The Current Account is closely watched because persistent deficits can pressure a currency and increase reliance on foreign capital. Surpluses strengthen currencies and often occur in export-driven economies like Germany, China, and Japan.

Market impacts:

FX: Largest impact, especially in emerging markets.
Equities: Strong account supports business stability.
Bonds: Deficits may raise yields due to funding needs.
Commodities: Export-heavy countries are sensitive to commodity cycles.

It is a cornerstone of long-term macro evaluation.

Interest Rates

Type: Leading
Importance Score: 10

Central bank policy rates are among the most market-moving global indicators. They set the benchmark cost of borrowing in an economy and influence lending rates, consumer spending, business investment, inflation, and currency strength.

Examples include the Federal Funds Rate (US), ECB Main Refinancing Rate, BOE Bank Rate, and Bank of Japan Rate.

Definition

The policy rate is the interest rate at which commercial banks can borrow from the central bank.

It guides monetary conditions and is used to control inflation and stimulate or slow economic growth.

Formula

There isn’t a single formula, but the rate influences other rates via:

i_loan ≈ i_policy + risk premium + term premium

Central banks set targets for inflation and employment; interest rate decisions are based on a Taylor Rule approximation:

i_t = r* + π_t + 0.5(π_t – π*) + 0.5(y_t – y*)

Where:

r* = neutral real rate
π_t= current inflation
π* = target inflation
y_t= actual output
y* = potential output

Related Indicators

CPI and PPI (inflation)
GDP growth
Unemployment and labor markets
Yield curve and bond prices

Why It Matters to Traders

FX: Central bank rate hikes strengthen the currency; cuts weaken it.
Equities: Rate hikes can depress stocks, especially growth sectors; cuts are supportive.
Bonds: When interest rates rise, bond prices fall and vice versa.
Commodities: Higher rates increase opportunity cost of holding commodities; weaker for gold.

Announcements often trigger sharp intraday moves. Markets trade expectations, not just actual rate decisions.

Consumer Confidence Index (CCI)

Type: Leading
Importance Score: 8

Release Timing: Monthly, mid-month

The Consumer Confidence Index measures how optimistic or pessimistic households feel about the economy, employment, income, and spending.

Since consumer spending accounts for the majority of GDP in most developed countries, confidence levels are highly predictive of future economic activity.

Definition

CCI ranges roughly from 0–200:

Above 100 signals optimism, spending likely to rise
Below 100 signals pessimism, spending may fall

It is compiled from household surveys asking about current conditions and future expectations.

Formula | CCI is a weighted average:

CCI=∑ (P_i × W_i)

Where:

P_i = percentage of positive responses

W_i = weight for each survey component.

Related Indicators

Retail Sales (spending behavior)
GDP (consumption component)
PMI services sector
Employment and wage growth

Why It Matters to Traders

FX: Stronger consumer confidence often supports the currency.
Equities: High confidence favors cyclical sectors (consumer discretionary, travel).
Bonds: Rising confidence may pressure bond prices due to expected rate hikes.
Commodities: Industrial metals and energy benefit from rising consumer sentiment.

CCI is forward-looking, providing an early indication of retail, consumption, and growth trends.

Business Confidence Index (BCI)

Type: Leading
Importance Score: 8

Business Confidence Index (BCI) measures corporate managers’ outlook on production, investment, hiring, and general economic conditions.

Positive business sentiment indicates planned expansion; negative sentiment hints at slower investment and potential layoffs.

Definition

BCI is derived from survey questionnaires targeting purchasing managers, CEOs, or CFOs.

Components often include expectations for sales, capital expenditure, employment, and inventory.

Formula

BCI = ∑ ( P_positive – P_negative )

Where P = percentage of positive/negative responses.

Related Indicators

PMI Manufacturing and Services
GDP growth
Retail sales
Industrial production

Why It Matters to Traders

FX: Positive business sentiment supports domestic currency.
Equities: Corporate optimism drives capital expenditures and earnings projections.
Bonds: Rising confidence may raise yields due to growth and inflation expectations.
Commodities: Increased investment signals higher industrial demand.

BCI is especially important in economies with large export sectors because corporate sentiment often predicts trade flows.

Manufacturing Orders / Factory Orders

Type: Leading
Importance Score: 7

Manufacturing Orders track the total value of new purchase orders received by manufacturers, reflecting demand for future production.

They are a leading indicator of industrial production, GDP, and trade balance.

Definition

Orders are tracked monthly and include durable and non-durable goods.

Rising orders suggest expanding production, investment, and labor demand.

Declining orders indicate contraction.

Formula

Orders Change (%) = (Orders_t– Orderst_t-1) / Orders_t-1) × 100

Related Indicators

Industrial Production
PMI New Orders
GDP manufacturing component
Trade balance

Why It Matters to Traders

FX: Strong orders support domestic currency through expected growth.
Equities: Manufacturing-heavy sectors (autos, machinery, electronics) react strongly.
Bonds: Rising orders may trigger yield increases due to anticipated inflation.
Commodities: Steel, metals, and energy demand correlate with manufacturing orders.

This indicator is forward-looking because it reflects anticipated production and investment before output actually occurs.

Housing Starts / Building Permits

Type: Leading
Importance Score: 8

Release Timing: Monthly, mid-month

Housing Starts measure the number of new residential construction projects begun in a month.

Building Permits track approved future construction. Both are vital for understanding consumer confidence, employment in construction, materials demand, and overall economic activity.

Definition

Housing Starts: Initiated new residential buildings
Building Permits: Approved future construction

Residential construction is a leading driver of employment, durable goods consumption, and GDP.

Formula

Change (%) = (Current Month – Previous Month) / Previous Month ×100

Related Indicators

Retail sales of home-related goods
Construction employment
Mortgage rates
GDP residential investment component

Why It Matters to Traders

FX: Strong housing data supports the currency via economic growth expectations.
Equities: Construction, materials, and home improvement sectors benefit.
Bonds: Rising housing can trigger rate expectations if inflation risk increases.
Commodities: Lumber, steel, and copper prices often move with housing data.

Housing data is a forward-looking indicator because it predicts future construction activity and spending, making it highly watched in economic calendars.

Producer Confidence / Business Survey Indices

Type: Leading
Importance Score: 7

Producer Confidence (also called Business Survey Indices in some countries) measures the outlook of manufacturers and other producers regarding production, orders, investment, and employment.

It is forward-looking and signals potential changes in industrial activity and GDP growth.

Definition

These surveys ask respondents to rate:

Production expectations
Order backlogs
Inventory levels
Employment intentions
Capital expenditure plans

High producer confidence suggests expanding production, while low confidence implies caution or contraction.

Formula

Typically calculated as a diffusion index:

Index > 100 indicates expansion
Index < 100 indicates contraction

Related Indicators

PMI Manufacturing (often correlates closely)
Industrial Production
GDP growth
Trade balance

Why It Matters to Traders

FX: Strong confidence signals stronger currency due to expected growth.
Equities: Industrial, manufacturing, and cyclical sectors are most sensitive.
Bonds: Rising confidence may increase yields via growth expectations.
Commodities: Metals and energy see demand forecasts reflected in sentiment.

Producer confidence is watched as an early warning signal of economic acceleration or slowdown.

Durable Goods Orders

Type: Leading
Importance Score: 7

Release Timing: Monthly, mid-month

Producer Confidence (also called Business Survey Indices in some countries) measures the outlook of manufacturers and other producers regarding production, orders, investment, and employment.

It is forward-looking and signals potential changes in industrial activity and GDP growth.

Definition

These surveys ask respondents to rate:

Production expectations
Order backlogs
Inventory levels
Employment intentions
Capital expenditure plans

High producer confidence suggests expanding production, while low confidence implies caution or contraction.

Formula

Typically calculated as a diffusion index:

Index > 100 indicates expansion
Index < 100 indicates contraction

Related Indicators

PMI Manufacturing (often correlates closely)
Industrial Production
GDP growth
Trade balance

Why It Matters to Traders

FX: Strong confidence signals stronger currency due to expected growth.
Equities: Industrial, manufacturing, and cyclical sectors are most sensitive.
Bonds: Rising confidence may increase yields via growth expectations.
Commodities: Metals and energy see demand forecasts reflected in sentiment.

Producer confidence is watched as an early warning signal of economic acceleration or slowdown.

Jobless Claims / Initial Unemployment Claims

Type: Leading
Importance Score: 8

Jobless claims measure the number of people filing for unemployment benefits for the first time. This weekly release is a leading indicator of labor market trends, consumer spending, and economic momentum.

Definition

Initial claims: New claims filed in a week
Continuing claims: Total ongoing unemployment benefits

Fewer claims indicate a strong labor market; rising claims indicate weakness.

Formula

No complex formula. Simply the reported number of claims. Often expressed as a rolling 4-week average to smooth volatility:

4-week average = (Week₁ + Week₂ + Week₃ + Week₄) / 4

Related Indicators

Unemployment rate
Non-Farm Payrolls
Consumer confidence
Retail sales

Why It Matters to Traders

FX: Strong labor market reduces unemployment, supporting currency.
Equities: Fewer claims boost consumer-driven sectors.
Bonds: Rising claims can push yields lower due to expected monetary easing.
Commodities: Indirectly affects consumption-sensitive commodities.

Weekly frequency makes it a high-impact, early signal for labor trends, often moving markets quickly, especially in the US.

Average Hourly Earnings / Wage Growth

Type: Leading
Importance Score: 9

Average Hourly Earnings track wage changes for employees. Wage growth is critical because it feeds directly into inflation, consumer spending, and corporate costs.

Rising wages can signal a tightening labor market, higher consumption, and potential interest rate hikes.

Definition

Wage growth shows how much pay increases over time, usually monthly or yearly, adjusted for seasonal factors.

Central banks monitor wages as part of their inflation outlook.

Formula

Wage Growth (% YoY) = (AHE_t – AHE_t-12) / AHE_t-12) × 100

Wage Growth (% MoM) = (AHE_t – AHE_t-1) / AHE_t-1) × 100

Where

AHE = Average Hourly Earnings

Related Indicators

CPI (inflation correlation)
Unemployment rate
Non-Farm Payrolls
Consumer spending

Why It Matters to Traders

FX: Rising wages increase inflation expectations, strengthening currency.
Equities: Moderate wage growth supports earnings; excessive growth may hurt margins.
Bonds: High wages can push yields higher via inflation expectations.
Commodities: Increased spending supports demand for goods and energy.

Wage growth is often a market-moving indicator, especially when paired with employment reports.

Manufacturing Output / Industrial Capacity Utilization

Type: Leading
Importance Score: 8

Manufacturing Output measures the physical production in factories, while Capacity Utilization shows what percentage of total potential output is actually used.

These indicators are leading because they reveal potential bottlenecks, inflation pressures, and future GDP trends.

Definition

Manufacturing Output: Production volume changes
Capacity Utilization: Actual Output / Potential Output × 100

High utilization may indicate growing demand and potential inflation.

Low utilization signals slack and slowdown.

Formula

Capacity Utilization (%) = (Actual Production / Maximum Possible Production) × 100

Manufacturing Output Change (%) = (Output_t Output_t-1) / Output_t-1) × 100

Related Indicators

PMI Manufacturing
Industrial Production
Durable Goods Orders
Inflation indicators (CPI/PPI)

Why It Matters to Traders

FX: Strong output/usage supports currency due to economic growth.
Equities: Industrial and cyclical sectors benefit.
Bonds: Rising output may trigger higher yields if inflation risk rises.
Commodities: Energy, metals, and industrial materials are sensitive.

Manufacturing Output and Capacity Utilization give early signals of economic expansion or contraction.

Services PMI

Type: Leading
Importance Score: 8

The Services PMI measures the economic activity in the services sector, which often constitutes the largest part of GDP in developed economies.

It surveys businesses on new orders, output, employment, and delivery times, providing insight into sectoral health.

Definition

Similar to Manufacturing PMI:

>50 signals expansion
<50 signals contraction

Because services dominate consumer spending, the index signals consumption trends and economic momentum.

Formula

PMI (Services) = ∑ (% positive + 0.5 × % neutral)

Related Indicators

Retail Sales
Employment / Jobless Claims
Consumer Confidence Index
GDP Services Component

Why It Matters to Traders

FX: Positive Services PMI strengthens currency.
Equities: Consumer-driven sectors (retail, hospitality, healthcare) respond strongly.
Bonds: Rising services activity can push yields higher.
Commodities: Less direct than manufacturing but can influence energy and industrial metals.

Services PMI provides an early view of the largest GDP segment, offering forward-looking signals for trading and economic expectations.

Consumer Credit / Private Sector Lending

Type: Leading
Importance Score: 7

Consumer Credit measures total borrowing by households, including credit cards, loans, and mortgages.

Private sector lending is a broader measure including business loans.

Both indicate spending capacity, financial health, and potential future consumption.

Definition

Rising credit indicates higher consumer and business spending potential
Falling credit suggests tightening, reduced consumption, and slower growth

Formula

Credit Growth (%) = [ Credit_t – Credit_t-1) / Credit_t-1] x 100

Related Indicators

Retail Sales
Consumer Confidence Index
CPI / Inflation
Interest Rates

Why It Matters to Traders

FX: Rising credit growth often supports currency via expected economic activity.
Equities: Consumer-focused sectors benefit from increased borrowing.
Bonds: Expanding credit may increase inflation expectations, affecting yields.
Commodities: Energy and consumption-linked commodities respond indirectly.

Credit growth is forward-looking, signaling potential boosts or slowdowns in consumption and investment.

Construction Spending

Type: Leading
Importance Score: 7

Release Timing: Monthly, usually mid-month

Explanation

Construction Spending tracks total expenditures on residential, non-residential, and public construction projects.

It signals economic momentum because construction is capital-intensive and strongly linked to employment, raw materials demand, and consumer confidence.

Formula

Construction Spending (% MoM) = [ Spending_t – Spending_t-1) / Spending_t-1] × 100

Trading Relevance

FX: Rising construction spending signals stronger domestic currency due to growth expectations.
Equities: Construction, materials, and homebuilder stocks respond immediately.
Bonds: Growth signals may push yields higher; slow spending may support bonds.
Commodities: Steel, cement, lumber, and other construction materials see increased demand.

Notes

Sensitive to weather and seasonal factors; seasonal adjustments are important.
Often correlates with housing starts and permits.

Existing Home Sales

Type: Lagging / Coincident
Importance Score: 6
Release Timing: Monthly, usually mid-month

Existing Home Sales track the sale of previously owned homes.

Unlike housing starts, this reflects current economic conditions and consumer demand rather than future construction.

Strong sales indicate consumer confidence and credit availability; weak sales suggest tightening financial conditions or economic slowdown.

Formula

Sales Change (% MoM) = [ (Sales_t – Sales_t-1) / Sales_t-1) × 100

Trading Relevance

FX: Strong sales signal moderate currency support.
Equities: Real estate investment trusts (REITs) and housing-related stocks respond.
Bonds: Rising home sales may indicate inflationary pressure driving yields up.
Commodities: Indirectly affects lumber, appliances, and consumer goods.

Notes

Sensitive to interest rates and mortgage availability.
Often compared with New Home Sales for a comprehensive housing picture.

Mortgage Applications

Type: Leading
Importance Score: 6
Release Timing: Weekly, every Wednesday

Mortgage Applications track the number of new applications for home loans, including purchase and refinance requests.

This indicator reflects consumer demand for housing and borrowing conditions.

Rising applications suggest strong housing demand and confidence, while declines may indicate caution or higher interest rates.

Formula

Mortgage Applications Change (%) = [( Applications_t – Applications_t-1) / Applications_t-1) × 100

Trading Relevance

FX: Rising mortgage applications can support the currency through expectations of stronger economic activity.
Equities: Homebuilders, mortgage lenders, and REITs respond quickly.
Bonds: Increased borrowing may affect bond yields; declining applications may increase bond demand.
Commodities: Lumber, appliances, and home construction materials can be indirectly influenced.

Notes

Highly sensitive to weekly interest rate changes and mortgage rates.
Often considered a short-term leading indicator for housing starts and construction spending.

ISM Non-Manufacturing Index

Type: Leading
Importance Score: 8
Release Timing: Monthly, early in the month

The ISM Non-Manufacturing Index (Services PMI equivalent in the U.S.) measures business activity, new orders, employment, and supplier deliveries in the services sector.

Since services dominate the U.S. economy, it provides a near-real-time picture of growth and inflationary pressures.

Formula

ISM NMI = ∑ (% of positive responses + 0.5 × % of neutral responses)

>50: Expansion
<50: Contraction

Trading Relevance

FX: Strong index signals USD appreciation due to growth expectations.
Equities: Consumer services, tech, healthcare, and financials respond.
Bonds: Rising activity signals that yields may increase; slowing activity signals that yields may decline.
Commodities: Indirect impact, mainly via business activity and energy demand.

Notes

Often paired with Manufacturing PMI for a complete picture of U.S. economic activity.
Sensitive to economic shocks, policy changes, and consumer demand shifts.

Factory Orders

Type: Leading
Importance Score: 7
Release Timing: Monthly, mid-month

Factory Orders measure the total value of new orders placed with manufacturers for both durable and non-durable goods.

This indicator signals business demand and production trends, providing insight into industrial activity and future economic growth.

Formula

Factory Orders (% MoM) = [ (Orders_t – Orders_t-1) / Orders_t-1) × 100

Trading Relevance

FX: Rising orders signal currency support via expected economic growth.
Equities: Industrials, machinery, and materials stocks benefit.
Bonds: Strong orders may push yields higher; weak orders may drive yields lower.
Commodities: Metals and energy prices react to increased industrial demand.

Notes

Often analyzed with Durable Goods Orders and PMI for broader industrial trend insights.
Sensitive to business cycle fluctuations and global demand.

Conference Board Leading Economic Index (LEI)

Type: Leading
Importance Score: 9
Release Timing: Monthly, end of month

The LEI aggregates ten leading indicators including unemployment claims, stock prices, building permits, and interest rate spreads.

The end goal is to predict economic trends over the next 6–12 months.

It is widely used to anticipate expansions and recessions.

Formula

LEI = Weighted Average of 10 Leading Indicators (standardized)

Trading Relevance

FX: Rising LEI signals currency appreciation due to growth expectations.
Equities: Broad market impact; cyclical sectors benefit during expected expansions.
Bonds: Rising LEI may increase yields; falling LEI supports bonds.
Commodities: Industrial commodities respond to forward-looking growth signals.

Notes

Highly respected for recession forecasting.
Strong predictive power when combined with PMI and employment trends.

Personal Income

Type: Leading / Coincident
Importance Score: 7
Release Timing: Monthly, usually end of month

Personal Income measures total earnings received by individuals, including wages, salaries, interest, dividends, and transfer payments.

Rising income signals higher consumer spending potential and economic growth. Falling income can reduce consumption and slow GDP growth.

Formula

Personal Income (% MoM) = [ (Income_t – Income_t-1) / Income_t-1 ] × 100

Trading Relevance

FX: Higher income signals stronger currency through consumption-driven growth.
Equities: Consumer discretionary, retail, and services sectors respond positively.
Bonds: Rising income may increase inflation expectations which may cause yields to rise.
Commodities: Energy and consumer goods may see higher demand.

Notes

Often compared with Personal Spending to gauge household saving vs. spending behavior.
Sensitive to labor market changes and fiscal policy.

Non-Durable Goods (Industrial Orders)

Type: Leading
Importance Score: 6
Release Timing: Monthly, mid-month

Industrial Orders for Non-Durable Goods track orders for products with short life spans, such as food, chemicals, and textiles.

They provide insight into current and near-term industrial activity and domestic demand.

Formula

Orders Change (% MoM) = [ (Orders_t – Orders_t-1) / Orders_t-1] × 100

Trading Relevance

FX: Rising orders signal currency support due to expected economic growth.
Equities: Non-durable goods producers and industrial stocks benefit.
Bonds: Strong order growth may pressure yields upward; weak growth supports bonds.
Commodities: Chemicals, energy, and raw materials react to industrial demand.

Notes

Often analyzed alongside durable goods orders for a complete industrial picture.
Sensitive to supply chain disruptions and global demand shifts.

Fundamental Indicators

Macroeconomics

Microeconomics

At the same time, the assets themselves have a story to tell. In the case of stocks for instance, via periodic releases, these stories unfold in the form of financial statements and key metrics like ratios, growth projections, dividend numbers.

Trend

Identifies the presence, direction, and strength of market trends

Simple Moving Average (SMA)

The Simple Moving Average, or SMA, is a trend-following indicator used to smooth out price movement and show the general direction of an asset. Traders use it to understand whether prices are overall rising, falling, or staying flat.

SMA works by adding up the prices of the last “N” periods and dividing by N. For example, a 20-day SMA adds the last 20 closing prices and divides by 20. This creates one average point. As each day passes, the oldest price is removed and the newest is added, creating a smoother trend line.

Formula: SMA = (Sum of past N prices) ÷ N.

SMA works best in combination with RSI, MACD, and Bollinger Bands because these indicators confirm momentum, overbought/oversold levels, or volatility.

Its main limitation is that it reacts slowly. During sudden price spikes or drops, SMA may lag and cause late signals.

To avoid false signals, check the larger trend. For example,

Price moving slightly above the SMA in a strong downtrend is often false.
Also look for volume confirmation. If price crosses the SMA but volume is low, the signal is weak. Check if other indicators agree.
A crossover with no RSI or MACD support is usually unreliable.
Watch for whipsaws. These are quick moves above and below the SMA (usually happens in rangebound).

Best parameters are 20-day, 50-day, and 200-day SMAs. For stricter and more accurate signals, use longer averages like 50 or 100 periods because they filter out the noise.

For day trading, 5-min, 15-min, and 1-hour SMA charts are the most reliable.

You can use SMA to enter a position when price moves above the SMA with confirmation from RSI or MACD. You can use it to exit when price drops below the SMA after being above it for a while.

Hypothetical Example (for reference only):

Price is below the 50-SMA on a 15-min chart.
Price rises and closes above the SMA.
RSI moves above 50, confirming strength.
Enter a buy position.
Place a stop-loss below the recent low.
Exit when price closes back below the SMA.

Exponential Moving Average (EMA)

Exponential Moving Average or EMA, is a trend indicator that reacts faster to price changes than the SMA. Traders use EMA to spot trend direction and momentum changes more quickly. Because it gives more weight to recent prices, it helps detect early signals.

EMA works by applying a multiplier to recent prices so the newest prices matter more. This makes EMA more sensitive and useful for fast-moving markets. While the SMA treats all days equally, the EMA “pays attention” to what’s happening now.

Formula: EMA = (Closing Price × Multiplier) + (previous day’s EMA) × (1 – Multiplier)

where Multiplier = 2 ÷ (N + 1).

EMA is best combined with MACD (which uses EMAs), RSI for confirmation, and volume indicators.

Its main limitation is that it can give too many signals during noisy or sideways markets because it moves quickly.

To spot false signals:

Check the strength of the trend.
If EMA crosses but price is barely moving, it is often false.
Confirm with RSI. If EMA gives a buy signal while RSI stays below 50, momentum may be weak.
Check higher timeframes. If the 1-hour trend is down but the 5-min EMA crosses up, the signal may fail.
Confirm volume. If volume is low during the crossover, it may be unreliable.

Best parameters include the 9-EMA, 12-EMA, and 26-EMA. For stricter accuracy, use longer EMAs like 20, 30, or 50 periods.

For day trading, 1-min is too noisy, so 5-min, 15-min, and 1-hour are more accurate.

You can enter a position when price crosses above the EMA and RSI confirms momentum. Exit when price crosses below the EMA.

Hypothetical Example (for reference only):

On a 5-min chart, price is below the 20-EMA.
Price breaks above the EMA strongly.
RSI moves above 50.
Enter a buy.
Place stop-loss below the EMA.
Exit when price closes under the EMA.

Ichimoku Cloud

Ichimoku Cloud is a trend and momentum indicator used to visualize support, resistance, trend direction, and potential reversal zones all in one chart. Traders use it to quickly assess market conditions.

Ichimoku Cloud works using five lines: Tenkan-sen (short-term average), Kijun-sen (medium-term average), Senkou Span A and B (forming the cloud), and Chikou Span (lagging line). Price above the cloud indicates an uptrend; below indicates a downtrend. The cloud’s thickness shows strength or weakness of the trend.

Formulas:
Tenkan-sen = (Highest High + Lowest Low) ÷ 2 over 9 periods
Kijun-sen = (Highest High + Lowest Low) ÷ 2 over 26 periods
Senkou Span A = (Tenkan-sen + Kijun-sen) ÷ 2 plotted 26 periods ahead
Senkou Span B = (Highest High + Lowest Low) ÷ 2 over 52 periods plotted 26 periods ahead
Chikou Span = Close plotted 26 periods back

Ichimoku works well with RSI, MACD, and volume to confirm trend strength.

Limitations include complexity for beginners and lag in choppy markets. False signals often occur when price is inside the cloud or when trend reverses quickly.

To find false signals:

check trend direction: only trade in the direction indicated by cloud color.
Confirm breakouts with volume. Use Chikou Span for additional confirmation. If it lags above price in a downtrend, the signal may be weak.
Compare multiple timeframes to reduce false signals.

Best parameters are standard 9-26-52 periods. For stricter signals, use longer periods like 12-26-52 to reduce noise.

For day trading, 5-min, 15-min, and 1-hour charts are most accurate.

Ichimoku can help enter positions when price breaks above the cloud in an uptrend with confirmation from Chikou Span and volume. It can help exit positions when price falls below the cloud or the trend weakens.

Hypothetical Example (for reference only):

On a 15-min chart, price breaks above the cloud.
Confirm Chikou Span is above price and volume rises.
Enter buy position.
Place stop-loss below the cloud.
Hold as long as price stays above cloud.
Exit if price closes below cloud or Chikou Span signals weakness.

Average Directional Index (ADX)

The Average Directional Index (ADX) is a trend strength indicator used to measure how strong a trend is, without indicating its direction. Traders use it to decide whether to trade trends or avoid choppy markets.

ADX works by comparing the difference between the positive directional movement (+DM) and negative directional movement (-DM) over a set period, then smoothing the result. Higher ADX values indicate a stronger trend, while low ADX shows weak or sideways markets.

Formulas:
+DI = 100 × (Smoothed +DM ÷ ATR)
-DI = 100 × (Smoothed -DM ÷ ATR)
DX = 100 × |+DI – -DI| ÷ (+DI + -DI)
ADX = Smoothed DX over N periods

ADX works well with trend indicators like SMA, EMA, MACD, and directional crossovers to confirm trend entries.

Limitations include lag in detecting trend changes and no indication of trend direction. False signals occur in low volatility or sideways markets.

To find false signals:

check trend direction. Rising ADX in a sideways market may give fake strength signals.
Confirm with price direction: ADX above 25 is strong only if +DI or -DI aligns with trend.
Use multiple timeframes. A 5-min ADX spike may be unreliable if the 1-hour chart shows sideways price.

Best parameters are 14 periods. For stricter signals, use 20 periods to smooth noise. For day trading, 5-min, 15-min, and 1-hour charts are most effective.

ADX can help enter positions by signaling strong trends when above 25 with +DI or -DI confirming direction. It can help exit positions when ADX starts declining, indicating trend weakening.

Hypothetical example (for reference only):

On a 15-min chart, ADX rises above 25 while +DI > -DI.
Confirm price is in an uptrend.
Enter a buy position.
Place stop-loss below recent support.
Hold while ADX remains above 25.
Exit when ADX declines or -DI crosses above +DI.

Volatility

Measures the degree of variation in the price over a specified time

Bollinger Bands

Bollinger Bands are a tool that helps traders see when a price is stretched too high or too low compared to its recent average. Think of them like a flexible rubber band around price. When price pushes too far outward, it often snaps back toward the middle.

What It Is Used For:
Bollinger Bands help spot overbought and oversold conditions, volatility changes, and possible reversals or breakouts.

How It Works: There are three lines:

The middle band is a Simple Moving Average (usually 20-period).
The upper band is the average plus two standard deviations.
The lower band is the average minus two standard deviations.
When the price touches or breaks the bands, it shows strong pressure.

Formula:
Upper band = SMA(20) + 2 × Standard deviation
Lower band = SMA(20) − 2 × Standard deviation

Best Indicators to Combine With:
RSI, MACD, and volume help confirm if a band touch is real or false.

Limitations:
Price can “ride the band” for a long time during strong trends, causing traders to enter too early.

How to find false signals:

Trend check: A touch of the upper band in a strong uptrend is not a sell signal. If price keeps making higher highs, the signal is likely false.
Candle confirmation: If price touches a band but the candles show no reversal pattern (like a bounce or a strong color change), the signal may be weak.
Volume: Low volume on a band touch often means the move is not strong enough to reverse.
Middle band reaction: Price must move back toward the middle band after the touch. If it doesn’t, the signal is likely false.
RSI agreement: If RSI does not show overbought/oversold at the same time, the signal is less trustworthy.

Best Parameters:
20-period SMA with 2 standard deviations is standard and reliable.

Stricter Parameters:
Use 20-period with 2.5–3 standard deviations for fewer, more accurate signals.

Day-Trading Timeframes:
5-min, 15-min, and 1-hour charts tend to be most stable.

Using Bollinger Bands to Enter:
Buy when price touches the lower band and then shows a clear bounce upward, ideally confirmed by RSI or volume.

Using Bollinger Bands to Exit:
Sell when price reaches the upper band and starts turning downward, especially if RSI also shows weakness.

Hypothetical Example (for reference only):

Watch a 15-min chart. Price falls and touches the lower Bollinger Band.
Check RSI: it is near or below 30, confirming oversold pressure.
Wait for a green candle to close above the previous candle. This shows a real bounce.
Enter a buy trade as the bounce begins.
Place a stop-loss slightly below the recent low.
Hold the trade as price moves toward the middle band.
Take profit at the middle band or upper band, depending on strength.

Average True Range (ATR)

The Average True Range (ATR) is a volatility indicator used to measure how much an asset typically moves during a period. Traders use it to understand risk, set stop-loss levels, and detect potential breakouts. ATR does not indicate trend direction but shows how strong or calm price movement is.

ATR works by calculating the true range, which considers the current high minus the current low, the absolute difference between the current high and the previous close, and the absolute difference between the current low and the previous close. Then, the average of these true ranges over a set number of periods is taken.

Formula:
True Range = max[(High – Low), |High – Previous Close|, |Low – Previous Close|]
ATR = Average of True Range over N periods

ATR works well with trend-following indicators like SMA or EMA, and with breakout systems.

Its limitation is that ATR only shows volatility, not trend direction, so a high ATR could occur in both upward and downward moves.

To avoid false signals,

confirm volatility changes with price direction. For example, a sudden ATR spike during consolidation may not indicate a real breakout.
Compare ATR readings across timeframes. If ATR rises on a 5-min chart but the 1-hour chart shows low volatility, the signal may be weak.
Combine with volume (low volume on a rising ATR can indicate a false move).

Best parameters are 14 periods, which balance responsiveness and smoothing. For stricter signals, use 20–21 periods to reduce false volatility spikes. For day trading, 5-min, 15-min, and 1-hour charts are most effective.

ATR can help enter positions by indicating when volatility is increasing before a breakout. It can help exit positions by adjusting stop-loss levels according to current volatility.

Hypothetical example (for reference only):

On a 15-min chart, ATR rises sharply while price breaks above recent highs.
Confirm rising volume to ensure the move is strong.
Enter a buy position at breakout.
Place a stop-loss at one ATR below entry.
Adjust stop-loss as ATR changes to protect profits.
Exit when price closes below the adjusted ATR stop.

CBOE Volatility Index (VIX)

The CBOE Volatility Index (VIX) is a volatility indicator, often called the “fear index.” It measures the market’s expectation of volatility over the next 30 days based on S&P 500 options prices. Traders use it to anticipate market uncertainty and potential large price moves.

It works by analyzing option premiums: high premiums signal higher expected volatility. Mathematically, it involves a weighted formula of call and put option prices, which calculates the expected variance of the S&P 500 index.

VIX is often combined with trend indicators like moving averages or momentum tools to decide if a spike in fear could signal a reversal.

Limitations: VIX does not predict direction, only magnitude of potential moves.

False signals occur when VIX spikes during normal pullbacks without broader market confirmation.

Spotting false signals

confirm market direction with price action or trend indicators.

For day trading, shorter-term VIX changes can help anticipate intraday volatility, though it is mostly used on daily to weekly charts. Alternative parameters include using VIX derivatives like VIX futures for more precise entry timing.

VIX can help enter positions: high spikes may indicate oversold conditions and potential rebounds; low levels suggest complacency and possible breakdowns. It can help exit positions: rising VIX warns of increased risk, suggesting tightening stops or partial exits.

Hypothetical example (for reference only):
Asset: S&P 500 ETF (SPY). VIX rises from 15 to 25 while SPY dips sharply. Enter long on SPY near support, confirmed by bullish candlestick patterns. Place stop-loss below the support level. Exit partially as SPY rebounds and VIX begins to decline, signaling reduced fear and lower volatility.

Keltner Channel

The Keltner Channel is a volatility and trend indicator used to identify overbought and oversold conditions, breakout opportunities, and trend direction. Traders use it to time entries and exits.

It works by plotting a center line (typically an EMA) with upper and lower bands based on Average True Range (ATR). Price touching the upper band can indicate overbought, the lower band oversold.

Formulas:
Middle Line = EMA (usually 20)
Upper Band = EMA + (Multiplier × ATR)
Lower Band = EMA − (Multiplier × ATR)

Keltner Channels work well with RSI, MACD, or trend indicators to confirm breakouts or reversals.

Limitations include false signals in sideways markets, where price may repeatedly touch bands without trending.

To find false signals:

confirm price direction and volume. Breakouts above the upper band with low volume may fail.
Check trend alignment with EMA. If EMA is flat, signals are weaker.
Use multiple timeframes. A 5-min breakout may fail if 1-hour chart shows consolidation.

Best parameters to use are 20 EMA, 2 ATR multiplier. Stricter signals: 50 EMA, 2.5 ATR to reduce noise. Day trading: 5-min, 15-min, and 1-hour charts.

Keltner Channels can help enter positions when price closes above the upper band in an uptrend or below the lower band in a downtrend with confirmation. They help exit positions when price reverts toward the middle line or opposite band.

Hypothetical example (for reference only):

On a 15-min chart, price closes above upper Keltner band with rising volume.
Confirm EMA trending up.
Enter buy position.
Place stop-loss near middle line.
Hold as long as price stays above upper band.
Exit if price closes below middle line.

Momentum

Determines the strength of a trend, by how fast price changes

MACD

MACD (Moving Average Convergence Divergence) is a momentum indicator used to measure the strength and direction of a trend. It helps traders see when momentum is increasing or decreasing and when a reversal might happen.

MACD works by subtracting the 26-EMA from the 12-EMA to form the MACD line. A 9-EMA of that line becomes the Signal Line. When the MACD line crosses above the Signal Line, it suggests upward momentum. When it crosses below, momentum is weakening. The histogram shows the difference between the two lines.

Formulas:
MACD Line = EMA(12) – EMA(26)
Signal Line = EMA(9) of the MACD Line
Histogram = MACD Line – Signal Line

MACD works best with RSI and EMA because these confirm momentum and trend direction.

Its limitations include lagging signals and poor performance in sideways markets where crossovers happen too often.

To find false signals

check the trend direction. A bullish MACD crossover during a downtrend is often false.
Look for histogram strength. If the histogram barely grows after a crossover, momentum is weak.
Use RSI confirmation. If MACD says “buy” but RSI stays below 50, the signal may fail.
Check price action. If candles show indecision (dojis or tiny bodies), MACD signals may be unreliable.
Also check higher timeframes. If the 1-hour MACD is bearish but the 5-min shows a bullish crossover, the small signal may reverse quickly.

Best parameters are the standard 12-26-9. For stricter accuracy, use longer EMAs such as 20-50-10 to reduce noise.

For day trading, the best timeframes are 5-min, 15-min, and 1-hour.

Use MACD to enter when the MACD line crosses above the Signal Line with strong histogram growth. Use it to exit when the MACD line crosses below the Signal Line.

Hypothetical example (for reference only):

MACD histogram turns from red to green on a 15-min chart.
MACD line crosses above Signal Line.
RSI moves above 50.
Enter a buy.
Place stop-loss under nearest support.
Exit when MACD crosses back down.

Relative Strength Index (RSI)

The Relative Strength Index (RSI) is a momentum indicator that helps traders understand when a stock might be rising too fast or falling too fast. Think of it like a pressure meter for price movement. When pressure becomes extreme, a reversal may be near.

What Is It Used For?

RSI is used to find overbought (above 70) and oversold (below 30) conditions. This helps traders guess when price might slow down, reverse, or pause.

How Does It Work?

RSI compares recent positive price movement (gains) with negative movement (losses). It then gives a score from 0 to 100.

High score means lots of buying pressure
Low score means lots of selling pressure

Math Formula (simple form):

RSI = 100 – (100 ÷ (1 + RS))
RS = Average Gain ÷ Average Loss over N periods

Best Indicators to Combine With:

Bollinger Bands (for price extremes)
Simple Moving Averages (SMA) (to confirm trend direction)
MACD (to confirm momentum shifts)

Limitations:

RSI can stay above 70 or below 30 for a long time in strong trends. Acting immediately on these levels can lead to mistakes.

How to Spot False Signals (detailed):

Check the trend direction:
RSI “overbought” is not a sell signal during a strong uptrend. If price is making higher highs and staying above long-term SMAs, the signal may be false.
Look for RSI divergence:
- Bearish divergence: price makes a higher high, RSI makes a lower high more reliable.
- No divergence, signal may be weak or false.
Confirm with another indicator:
If RSI drops below 30 but Bollinger Bands show no bounce, the oversold signal may be unreliable.
Watch volume:
A reversal is stronger when volume increases. Weak volume often means a false signal.
Check multiple timeframes:
If a 5-min chart shows oversold but a 1-hour chart shows strong uptrend, the signal is likely false.

Best Parameters:

14 periods is the standard and most balanced setting.

Stricter Alternative Parameters:

Use range of 20-80, instead of 30-70. Will provide fewer signals, but it will filter out the noise.

Use 20–30 periods. These give fewer signals but more accuracy and fewer false alarms.

Best Day-Trading Timeframes:

RSI is most reliable on 5-min, 15-min, and 1-hour charts. Very short charts (1-min) create noise and false signals.

Using RSI for Entries:

Enter when RSI goes below 30 and rises back above 30, showing sellers are weakening.

Using RSI for Exits:

Exit when RSI goes above 70 and falls back below 70, showing buyers are weakening.

Stochastic Oscillator

The Stochastic Oscillator is a momentum indicator used to show overbought or oversold conditions by comparing closing price to the high-low range over a period. Traders use it to anticipate reversals and confirm trends.

It works by calculating %K, which shows where the current close is relative to the recent high-low range, and %D, a moving average of %K. Values above 80 indicate overbought conditions; below 20 indicate oversold.

Formulas:
%K = ((Close – Lowest Low) ÷ (Highest High – Lowest Low)) × 100
%D = 3-period SMA of %K

Stochastic works best with RSI, MACD, and trend indicators like SMA/EMA.

Limitations include giving false signals in strong trends, overbought or oversold readings may persist.

To spot false signals:

check trend direction: in a strong uptrend, oversold %K may not indicate a reversal.
Look for divergence: if price makes new highs but %K does not, a reversal is likely.
Confirm with volume. Weak volume can produce false signals.
Compare multiple timeframes: a 5-min oversold signal may fail if 15-min or 1-hour charts show strong momentum.

Best parameters are 14, 3, 3 (periods for %K, slowing, %D). Stricter signals use 20, 5, 5 for more reliable reversals. For day trading, 5-min, 15-min, and 1-hour charts are preferred.

Stochastic can help enter positions when %K rises above 20 from oversold, confirmed by %D crossover and trend. It can help exit positions when %K drops below 80 from overbought.

Hypothetical example (for reference only):

On a 15-min chart, %K drops below 20.
%K crosses above %D, forming a bullish signal.
Confirm green candle and rising volume.
Enter buy position.
Place stop-loss below recent low.
Exit when %K rises above 80 or candles show weakness.

Average Directional Index (ADI)

Formulas:
+DI = 100 × (Smoothed +DM ÷ ATR)
−DI = 100 × (Smoothed −DM ÷ ATR)
DX = 100 × |+DI – -DI| ÷ (+DI + -DI)
ADX = Smoothed DX over N periods

ADX works well with trend indicators like SMA, EMA, MACD, and directional crossovers to confirm trend entries.

Limitations include lag in detecting trend changes and no indication of trend direction. False signals occur in low volatility or sideways markets.

To find false signals:

check trend direction: rising ADX in a sideways market may give fake strength signals.
Confirm with price direction: ADX above 25 is strong only if +DI or −DI aligns with trend.
Use multiple timeframes; a 5-min ADX spike may be unreliable if the 1-hour chart shows sideways price.

Best parameters are 14 periods. For stricter signals, use 20 periods to smooth noise. For day trading, 5-min, 15-min, and 1-hour charts are most effective.

ADX can help enter positions by signaling strong trends when above 25 with +DI or -DI confirming direction. It can help exit positions when ADX starts declining, indicating trend weakening.

Hypothetical example (for reference only):

On a 15-min chart, ADX rises above 25 while +DI > -DI.
Confirm price is in an uptrend.
Enter a buy position.
Place stop-loss below recent support.
Hold while ADX remains above 25.
Exit when ADX declines or -DI crosses above +DI.

Volume

Tracks amount of activity (transactions) over a specified period

On Balance Volume (OBV)

On Balance Volume (OBV) is a momentum and volume-based indicator used to measure buying and selling pressure. Traders use OBV to confirm trends, spot divergences, and anticipate price moves before they happen.

OBV works by adding volume on up days and subtracting volume on down days, creating a cumulative line that reflects how volume flows into or out of a stock. Rising OBV indicates strong buying pressure, falling OBV shows selling pressure.

The formula is:
If Close > Previous Close then OBV = Previous OBV + Volume
If Close < Previous Close then OBV = Previous OBV – Volume
If Close = Previous Close then OBV = Previous OBV

OBV works best with price trends, SMA/EMA, and MACD to confirm momentum or reversals.

Limitations include that OBV can lag during sudden price gaps and may give false signals in low-volume or choppy markets.

To find false signals:

check for divergence between OBV and price. If price rises but OBV falls, the trend may not be strong.
Confirm with volume spikes. Weak volume with rising OBV may be unreliable.
Check higher timeframes; a 5-min OBV divergence may be less meaningful than a 1-hour divergence.
Combine with moving averages or MACD to validate trend strength.

Best parameters are standard daily OBV or cumulative OBV for intraday charts. Stricter signals come from combining OBV with EMAs or filters to reduce noise. For day trading, 5-min, 15-min, and 1-hour charts provide reliable readings.

OBV can help enter positions by buying when OBV rises while price also moves up, confirming strength. It can help exit positions when OBV flattens or drops, indicating selling pressure.

Hypothetical example (for reference only):

On a 15-min chart, price starts rising.
OBV rises sharply, confirming buying pressure.
Enter a buy position as price breaks resistance.
Place stop-loss below recent support.
Monitor OBV; if it flattens or drops while price rises, tighten stop-loss.

Exit when OBV shows a clear decline or price falls below support.

Volume Weighted Average Price (VWAP)

Volume Weighted Average Price (VWAP) is a trend and value indicator used to show the average price a stock trades at throughout the day, weighted by volume. Traders use it to identify fair value, intraday trend direction, and potential entry or exit points.

VWAP works by taking the total dollar amount traded (price × volume) and dividing it by total volume over the trading period. It starts fresh each day and resets at market open, giving an intraday average price.

Formula:
VWAP = (Σ (Price × Volume)) ÷ Σ Volume

VWAP is best combined with RSI, moving averages, or support/resistance levels to confirm trends or reversals.

Limitations include that VWAP is only reliable intraday and resets daily. In fast-moving markets, price can deviate significantly before returning to VWAP, creating false signals.

To find false signals:

check if price is trending with volume. Price crossing VWAP with low volume is often unreliable.
Confirm with moving averages or RSI for trend alignment.
Also, compare with multiple intraday timeframes; a 5-min VWAP cross may be weaker than a 15-min confirmation.

Best parameters are the standard intraday calculation; stricter signals come from using VWAP with volume filters or multiple moving averages. It is most accurate on 1-min, 5-min, and 15-min charts for day trading.

VWAP can help enter positions by buying when price is above VWAP in an uptrend with strong volume. It can help exit positions by selling when price falls below VWAP, indicating weakening buying pressure.

Hypothetical example (for reference only):

On a 5-min chart, price crosses above VWAP with rising volume.
Confirm RSI above 50.
Enter buy position.
Set stop-loss slightly below VWAP.
Hold as long as price stays above VWAP.
Exit when price closes below VWAP or RSI drops below 50.

Accumulation/ Distribution line (A/D)

The Accumulation/Distribution Line (A/D Line) is a volume-based trend indicator used to measure whether a stock is being accumulated (bought) or distributed (sold). Traders use it to confirm trends, spot divergences, and anticipate potential price reversals.

A/D Line works by comparing the closing price relative to the high and low of the period. If the close is near the high, it indicates buying pressure; if near the low, selling pressure. This “money flow multiplier” is multiplied by volume to calculate the money flow for the period. The A/D Line is then cumulative over time.

Formulas:
Money Flow Multiplier = ((Close – Low) – (High – Close)) ÷ (High – Low)
Money Flow Volume = Money Flow Multiplier × Volume
A/D Line = Previous A/D + Money Flow Volume

It works best with price trends, moving averages, RSI, or MACD to confirm momentum.

Limitations include lagging signals in volatile markets, and false signals during sideways price action.

To find false signals:

look for divergence: if price makes higher highs but A/D Line does not, buying pressure is weakening.
Confirm volume trends. If A/D rises but price fails to follow, the trend may be weak.
Compare higher timeframes; intraday signals may fail if longer charts show opposite momentum.
Look for alignment with SMA/EMA or MACD for stronger confirmation.

Best parameters are standard cumulative A/D values. For stricter signals, apply a short EMA to smooth the A/D Line. For day trading, 5-min, 15-min, and 1-hour charts are most reliable.

A/D Line can help enter positions when rising alongside price, confirming strength. It can help exit positions when A/D flattens or declines while price rises, indicating potential selling pressure.

Hypothetical example (for reference only):

On a 15-min chart, price rises and A/D Line rises with it.
Confirm with a green candle and volume above average.
Enter a buy position.
Place stop-loss below recent support.
Monitor A/D Line; exit if it flattens or drops while price continues up.

Money Flow Index (MFI)

The Money Flow Index (MFI) is a momentum and volume-based indicator used to identify overbought or oversold conditions by considering both price and trading volume. Traders use it to anticipate potential reversals and confirm trends.

MFI works by calculating the “typical price” for each period: (High + Low + Close) ÷ 3. Then, it multiplies this price by volume to get the “money flow.” Positive money flow occurs when the typical price rises from the previous period; negative money flow occurs when it falls. The MFI is then calculated over N periods to produce a value from 0 to 100. Readings above 80 indicate overbought conditions, below 20 indicate oversold.

Formulas:
Typical Price = (High + Low + Close) ÷ 3
Raw Money Flow = Typical Price × Volume
Money Flow Ratio = Positive Money Flow ÷ Negative Money Flow
MFI = 100 – (100 ÷ (1 + Money Flow Ratio))

MFI works best with RSI, SMA/EMA, or MACD to confirm momentum or trend direction.

Limitations include false signals during strong trends. For example, an asset can remain overbought in a strong uptrend for an extended period.

To find false signals:

check the trend: overbought readings in a strong uptrend are often not a sell signal.
look for divergence between MFI and price: if price makes higher highs but MFI makes lower highs, a reversal is more likely.
confirm with volume; low volume on MFI signals can be weak.
Also, always compare timeframes. Oversold signals on a 5-min chart may not be reliable if the 1-hour chart shows strong uptrend.

Best parameters are 14 periods for intraday or daily charts. For stricter signals, use 20 periods to reduce noise. For day trading, 5-min, 15-min, and 1-hour charts are effective.

MFI can help enter positions when it rises above 20 after being oversold, indicating buyers returning. It can help exit positions when it falls below 80 after being overbought, showing sellers gaining control.

Hypothetical example (for reference only):

On a 15-min chart, MFI drops below 20.
Wait for MFI to rise above 20, signaling potential upward momentum.
Confirm with a green candle and rising volume.
Enter a buy position.
Place stop-loss below the recent low.
Exit when MFI approaches 80 or candles show weakness.

Feeling technical?

This is what charts look like

Live Chart Station

Main Chart Types

There are many types of charts, but only three are prevailing among analysts.

Although Candlestick charts are the most detailed for technical analysis, line charts and bar charts are also highly in demand.

Other examples include Tick charts, Point and Figure charts (P&F), Kagi charts, Renko charts, Three-line break charts, Range bar charts and volume charts

Line charts are also called close-only charts and for good reason. They take the closing prices of a given period, connect the consecutive points and create a line to represent their move.

Technical analysis today needs to be as accurate as possible, and a line chart doesn’t give the details of a trading session.

Many analysts favour line charts for their simplicity, since they regard the closing price of a session as the most important information to know. Dow (from Dow Jones) was one of these analysts.

Although more detailed charts are favoured by most, they can get really cluttered and don’t allow traders to spot events like a tight divergence.

Line charts display a clear trend direction, chart patterns and they can spot support/resistance levels, sometimes more accurately than other chart types.

Bar charts were the most widely used charts before candlesticks were invented in the 18^th century. They provide a more detailed representation of prices, since they display the closing price like a line chart, together with the opening price, and the highest/lowest price points reached in a session.

Knowing the added details, a trader can have a visual representation of the volatility of the security during a session. The opening price is always on the left, while the closing price is on the right.

Colours green and red, provide a quicker display of bearish or bullish sessions, making them more accurate than simple line charts. The colour of the bar, is chosen after calculating the difference between current closing price and previous closing price of the session rather than the open and close.

Candlestick chart type for technical analysis

Candlestick charts, are the most commonly used charts in technical analysis. Their origin was traced back to the 18^th century in Japan, tracking the price of rice, and they became very popular ever since.

They display the same information as bar charts, but in a different format. Wicks on top and below the bar display the highest/lowest prices of the session.

Colours green (or white) and red (or black) are also showing bearish and bullish sessions, but they take into consideration the opening and closing price of a session, rather than the closing of the previous session. The colours show the “real body” of the candlestick.

Other Chart Types

A new bar or candlestick is formed after a specific number of trades (ticks) have occurred, instead of after a time period.

A single bar might form in seconds during high activity or take minutes to form during a slow period.

This approach compresses low-activity periods and expanding high-activity periods, for a dynamic market representation.

Point and Figure chart type for technical analysis

Provide a clear, simplified view of price movements by filtering out noise. These charts use columns of X (for rising prices) and O (for falling prices) to visualize price moves.

Can be subjective, as traders must set a “box size,” the price increment that must be reached to plot a new X or O. A “reversal amount,” typically three boxes must also be set (the price must move in the opposite direction before a new column of Xs or Os is started).

Best suited for position trading aiming to capture broader market moves rather than short-term trading.

A preset reversal amount is determined (fixed amount, percentage, or based on Average True Range, and only when reached, a new line is plotted on the chart, ignoring time and volume in the process.

A number of vertical lines are connected in a series with short horizontal lines (also called shoulders when a rising vertical line connects to a vertical falling line). The horizontal lines are called waists when a vertical falling line connects to a vertical rising line.

To signal bullish or bearish trends, the lines change thickness or colour. A thick (or green) line is formed when the price increases above a previous high, known as Yang line. A thin (or red) line is formed when the price falls below a previous low, known as Yin line.

The charts are bult using uniformed sized bricks, as the name “Renko” from the Japanese word renga, means “bricks”.

A “brick size” is specified by the trader (by dollar value, number of pips, or average true range), which is the amount the price must move, before a new brick is added.

The new bricks, are placed at a 45-degree angle (up or down), adjacent and to the right of the previous brick.

When the price moves twice the “brick size”, the chart reverses and starts adding bricks in the opposite direction.

Heikin Ashi chart type for technical analysis

This chart resembles the candlestick chart type, with the difference that it averages all data points to smooth out price action and reduce the noise.

It’s a preferred choice by many professional traders, because it makes it easier to identify trends in comparison to traditional chart systems. Heikin Ashi means average bar, and it is used by traders to see the trend and general direction of the market, to signal reversals in trends, and support any trend strategy that makes sense.

Time periods

Time-tools-for-charts for technical analysis

Charts record the prices, and then display them in different periods (1-minute, 5-minute, 15-minute, 30-minute, hourly, daily, weekly, yearly). Every bar or candle represent these time periods accordingly. A 5-minute bar will display the opening and closing price of a 5-minute period and so on.

Short time periods display changes in prices much faster than long time periods and provide more clear signals to a trader. A 5-minute chart moves 12 times faster than an hourly chart (60 min / 5), so it’s more suitable for day traders and scalpers looking for entry points. At the same time, short frames require much faster responses and it can get tricky for a trader to successfully follow all changes.

It’s widely acceptable now that using one time period is not enough to confirm trading decisions. Multiple time frames should be at play, confirming the signals that the main time period is showing.

Drawing tools

Trendlines: A simple straight line drawn connecting two or more price points

Channels: Two parallel trendlines displaying potential trading zones

Andrews’ Pitchfork: Three parallel lines based on three selected price points to predict support and resistance areas in a trending market.

Ruler/Measure: Tools to calculate the distance, percentage change, and time duration between two points on the chart, which aids in risk-reward calculations and analysing price movements.

Long/Short Position Tools: Allow traders to visually plan their trades by marking entry, stop-loss, and take-profit levels, automatically calculating the risk-reward ratio

Shapes (Rectangles, Ellipses, Triangles): Used to display consolidation zones, support/resistance areas, or specific chart patterns

Text and Callouts: For notes, comments on the chart

Arrows and Symbols: Help in visually marking entry/exit points, or indicating the expected direction of price movement.

Fibonacci Retracements: Horizontal lines at key Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%, and 100%) that display reverse potential at various support and resistance levels

Fibonacci Extensions/Projections: Used to project potential future price targets after a trend continuation, based on the same mathematical ratios.

Gann Fans: A series of diagonal lines drawn from a significant high or low point at specific angles. Markets move in angles that display support and resistance levels

Gann Boxes and Squares: More complex tools that combine price and time to identify cycles and potential future price points

Pattern-Specific Tools: to verify chart patterns, such as Head and Shoulders, Double Tops/Bottoms, or Triangle patterns, which help with trend identification

Learn the concept, charts, indicators, patterns here

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