Lagging indicators are indicators used to analyze the market, utilizing an average of previous price action data. They’re called the “lagging indicators” because they lag the market. This implies that traders can see the move happen before the indicator confirms it. As a result, the trader can incur losses at the start of the move.
A leading indicator, on the other hand, is an indicator that estimates future price movements based on current price data. Because this indicator lets traders forecast future price movements, traders can place trades at the start of the move. One of its main disadvantages is that traders forecast future movements before they actually happen, so if the price moves in the opposite direction, the trader will lose money.