Technical indicators are mathematical calculations based on the price, volume or open interest of a security or contract. By analyzing historical data, technical analysts use indicators to predict future price movements.
There are two types of technical indicators: 1) overlays 2) oscillators.
1) Overlays: Technical indicators that use the same scale as prices are plotted over the top of the prices on a stock chart. Examples include moving averages and Bollinger Bands.
2) Oscillators: Technical indicators that oscillate between a local minimum and maximum are plotted above or below a price chart. Examples include that MACD or RSI.