Lagging Indicator


Lagging Indicator
1. A measurable economic factor that changes after the economy has already begun to follow a particular pattern or trend.

2. A technical indicator that trails the price action of an underlying asset, and is used by traders to generate transaction signals or to confirm the strength of a given trend. Since these indicators lag the price of the asset, a significant move will generally occur before the indicator is able to provide a signal.

1. Lagging indicators confirm long-term trends, but they do not predict them. Some examples are unemployment, corporate profits and labor cost per unit of output. Interest rates are another good lagging indicator; rates change after severe market changes.

2. An example of a lagging indicator is a moving average crossover, because it occurs after a certain price move has already happened. Technical traders use a short-term average crossing above a long-term average as confirmation when placing buy orders since it suggests an increase in momentum. The drawback of using this method is that a significant move may have already occurred, resulting in the trader entering a position too late.


Investment dictionary. . 2012.

Look at other dictionaries:

  • lagging indicator — ➔ indicator * * * lagging indicator UK US noun [C] (also lagging economic indicator) ► ECONOMICS a measure of economic activity that relates to events or developments in the past, not to changes that have taken place since those events or… …   Financial and business terms

  • Lagging indicator — A lagging indicator is an economic indicator that reacts slowly to economic changes, and therefore has little predictive value. Generally these types of indicators follow an event; they are historical in nature. For example, in a performance… …   Wikipedia

  • lagging indicator — / lægɪŋ ˌɪndɪkeɪtə/ noun an indicator (such as the gross national product) which shows a change in economic trends later than other indicators (NOTE: The opposite is leading indicator.) …   Dictionary of banking and finance

  • lagging indicator — noun : an economic indicator (as spending on new plants and equipment) that more often than not maintains an existent trend for some time after the state of the economy has turned onto an opposite trend called also lagger …   Useful english dictionary

  • lagging indicator — Econ a measurable economic factor, for example, corporate profits or unemployment, that changes after the economy has already moved to a new trend, which it can confirm but not predict …   The ultimate business dictionary

  • indicator — Used in the context of general equities. technical or fundamental measurement that securities analysts use to forecast the market s direction, such as investment advisory sentiment, volume of stock trading, direction of interest rates, and buying …   Financial and business terms

  • indicator — noun sign showing what sth is like ADJECTIVE ▪ accurate, good, reliable, sure ▪ poor, unreliable ▪ Level of education is actually a poor indicator of ability to run a business well …   Collocations dictionary

  • lagging — adj. Lagging is used with these nouns: ↑indicator …   Collocations dictionary

  • Economic indicator — Economics …   Wikipedia

  • economic indicator — Statistic used to determine the state of general economic activity or to predict it in the future. A leading indicator is one that tends to turn up or down before the general economy does (e.g., building permits, common stock prices, and business …   Universalium


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