Indicator Lag

Any calculation that averages or smooths a series responds to a change in that series only after some of the new values have entered it. An average over many bars is pulled toward a new price gradually, because the older values are still inside the window; a shorter window responds faster and also reacts to movement that turns out to be noise. That trade-off is arithmetic rather than a defect of a particular tool, and weighting does not remove it — weighting recent values more heavily reduces the delay without abolishing it. The consequence worth stating plainly is that an indicator is a description of prices that have already occurred. A line turning up records that recent prices were higher than earlier ones; it is not information about prices that have not happened yet, and no setting converts it into any. Tools described as leading are computed from the same past prices as the rest, differing in how those prices are transformed rather than in what they are able to see.