It’s important that you understand what leading indicators are and how they differ from coincident and lagging indicators. There are pros and cons to both. Make sure you understand these fundamentals.
Key points on Leading Indicators
- Leading indicators are used to predict the future.
- They aren’t always accurate
- They should not be relied on alone.
What is a Leading Indicator?
As mentioned in the brief, Leading Indicators are used to help predict the future.
But, as the future is never certain, it’s best to understand that they lean towards predicting what might happen.
The signals we pull from leading indicators can be used to help support our decision-making process.
Examples of Leading Indicators
There are numerous indicators you can use when trading, here are a list of leading indicators covered on True Miller.