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A technical indicator is fundamentally a mathematical calculation that is primarily derived from price and volume data, aimed at forecasting future price movements in the securities markets. Technical indicators aid traders in identifying patterns, trends, and potential reversals, allowing them to make more informed trading decisions.

These indicators utilize historical price data and trading volume to produce signals that can indicate whether a security is likely to increase or decrease in value. Examples include moving averages, relative strength index (RSI), and Bollinger Bands. Traders often rely on these indicators as part of their technical analysis strategy to generate buy or sell signals in the market.

The definition encompasses both the computation aspect, which relies on quantitative data, and its purpose of forecasting future trends, distinguishing it clearly from other options that relate to governance, market manipulation, or legalities surrounding trading.

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