What are indicators

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Indicator

Indicators are statistics used to measure current conditions as well as to forecast financial or economic trends.

Indicator

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Indicators can be broadly categorized into economic indicators and technical indicators.

Economic indicators are statistical metrics used to measure the growth or contraction of the economy as a whole or sectors within the economy. In fundamental analysis, economic indicators that quantify current economic and industry conditions are used to provide insight into the future profitability potential of public companies.

Technical indicators are used extensively in technical analysis to predict changes in stock trends or price patterns in any traded asset.

Economic Indicators

There are many economic indicators created by different sources in both the private and public sector. For example, the Bureau of Labor Statistics, which is the research arm of the U.S. Department of Labor, compiles data on prices, employment and unemployment, compensation and work conditions, and productivity. The price report contains information about inflation, import and export prices, and consumer spending.

The Institute for Supply Management (ISM) is a not-for-profit professional association for supply management and purchasing professionals. It has published its ISM Manufacturing Report on Business monthly since 1931. The report contains a composite index, the Purchasing Managers’ Index (PMI), which contains information on manufacturing and non-manufacturing orders. The index is a closely watched barometer of economic activity. The U.S. Department of Commerce uses ISM data in its evaluation of the economy.

For most of the 21st century, housing and real estate have been leading economic indicators. There are several metrics used to measure housing growth including the S&P/Case-Shiller Index, which measures house sale prices, and the NAHB/Wells Fargo Housing Market Index, which is a survey of home builders that measures the market appetite for new homes.

Other economic indicators include interest rates, the money supply, and consumer sentiment.

Technical Indicators

In the context of technical analysis, an indicator is a mathematical calculation based on a security’s price and/or volume. The result is used to predict future prices.

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The MACD is based on the assumption that the tendency of the price of a traded asset is to revert to a trend line. In order to discover the trend line, traders look at the moving averages of asset prices over different time periods, often over 50 days, 100 days and 200 days. In addition, moving averages can be either simple or exponential.

The RSI compares the size of recent gains to recent losses to determine the asset’s price momentum, either up or down. Using tools like the MACD and the RSI, technical traders will analyze assets’ price charts looking for patterns that will indicate when to buy or sell the asset under consideration.

What Is a Chemical Indicator?

How Can You Tell If a Chemical Solution Has Changed?

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  • Ph.D., Biomedical Sciences, University of Tennessee at Knoxville
  • B.A., Physics and Mathematics, Hastings College

A chemical indicator is a substance that undergoes a distinct observable change when conditions in its solution change. This could be a color change, precipitate formation, bubble formation, temperature change, or other measurable quality.

Another type of indicator that may be encountered in chemistry and other sciences is a pointer or light on a device or instrument, which may show pressure, volume, temperature, etc. or the condition of a piece of equipment (e.g., power on/off, available memory space).

The term “indicator” comes from the Medieval Latin words indicare (to indicate) with the suffix -tor.

Examples of Indicators

  • A pH indicator changes color over a narrow range of pH values in solution. There are many different pH indicators, which display different colors and act between certain pH limits. A classic example is litmus paper. Blue litmus paper turns red when it’s exposed to acidic conditions, while red litmus paper turns blue under basic conditions.
  • Fluorescein is a type of adsorption indicator. The dye is used to detect the completed reaction of the silver ion with chloride. Once sufficient silver is added to precipitate chloride as silver chloride, excess silver is adsorbed onto the surface. Fluorescein combines with adsorbed silver to produce a color change from greenish-yellow to red.
  • Other types of fluorescent indicators are designed to bond to selected molecules. The fluorescence signals the presence of the target species. A similar technique is used to label molecules with radioisotopes.
  • An indicator may be used to identify the endpoint of a titration. This may involve the appearance or disappearance of a color.
  • Indicators may indicate the presence or absence of a molecule of interest. For example, lead tests, pregnancy tests, and nitrate tests all employ indicators.

Desirable Qualities of a Chemical Indicator

To be useful, chemical indicators must be both sensitive and easily detectable. It need not, however, show a visible change. The type of indicator depends on how it’s being used. For example, a sample analyzed with spectroscopy may employ an indicator that wouldn’t be visible to the naked eye, while a test for calcium in an aquarium would need to produce an obvious color change.

Another important quality is that the indicator doesn’t change the conditions of the sample. For example, methyl yellow adds a yellow color to an alkaline solution, but if acid is added to the solution, the color remains yellow until the pH is neutral. At this point, the color changes from yellow to red. At low levels, methyl yellow does not, itself, change the acidity of a sample.

Typically, methyl yellow is used at extremely low concentrations, in the parts per million range. This small amount is sufficient to see a visible change in color, but not enough to change the sample itself. But what If an enormous amount of methyl yellow were added to a specimen? Not only might any color change be invisible, but the addition of so much methyl yellow would change the chemical composition of the sample itself.

In some cases, small samples are separated from larger volumes so that they can be tested using indicators that produce significant chemical changes.

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These example sentences are selected automatically from various online news sources to reflect current usage of the word ‘indicator.’ Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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