Glossary Term

Confirmation

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In technical analysis, confirmation is the use of a combination of technical indicators where one can be used to confirm the signal provided by another. For instance, traders commonly use the Relative Strength Index (RSI) indicator to identify overbought and oversold conditions. However, RSI on its own can produce many false signals, so traders will use other technical data such as support and resistance, volume or divergence to confirm that the overbought or oversold signals RSI provides are correct.

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