Glossary › false signal

Trading glossary · indicators

false signal

A hint from a chart or tool that turns out to be wrong, so price does not do what it seemed to say.

The fuller meaning

A signal that does not lead to the expected move. Every indicator and pattern produces them, especially when used in the wrong market condition, such as trend tools in a sideways market; stops, confirmation and position sizing exist because false signals cannot be avoided.

false signal.

Related words

61.8% level · ATR · ATR expansion · bearish divergence · Bollinger Bands · bullish divergence · crossover · %D · death cross · divergence