Indicator

An indicator is a sign, signal, or measurable quantity that conveys information about the state or development of a system. Indicators are used to describe, monitor, and forecast conditions, and they can be qualitative or quantitative, direct measurements or proxies that summarize broader phenomena.

In science and engineering, indicators take many forms. A chemical indicator changes its appearance, such as color, in response to a reagent's properties. An ecological indicator is a species or community whose status reflects environmental conditions. In electronics and displays, indicator lights signal operational status or alarms.

In economics, finance, and business, indicators play a central role in assessment and planning. Economic indicators track macro conditions (for example GDP, inflation, employment). Financial markets employ technical indicators derived from price and volume data (such as moving averages or relative strength index) to aid trading decisions. Key performance indicators, or KPIs, are metrics used by organizations to judge progress toward strategic goals.

Indicators have limitations. They are simplifications and can be affected by measurement methods or context; correlation does not imply causation, and some indicators lag behind real changes.

Examples include GDP or unemployment rate (economic indicators), the pH indicator used in chemistry, the indicator species in ecology, and a moving average as a financial indicator.