Lagging Indicator

A lagging indicator is an observable or measurable element that changes after the connected economic, financial, or business variable changes. Trends and changes in trends are confirmed by lagging indicators. Lagging indications, such as MADCs, RSI, stochastics, can be helpful for determining the direction of the overall economy. However, while providing useful information, lagging indicators are less reliable when compared to leading indicators, such as yield curve, durable goods orders and manufacturing jobs. It is important to understand that when analyzing a trend, we need to look at the whole picture (price, time, volume), not just one or two indicators.