A leading indicator is a technical analysis tool that aims to predict future price movements by analyzing current market conditions and trends. Unlike lagging indicators, which reflect past price behavior, leading indicators provide early signals of potential price changes, helping traders make more proactive decisions. Common examples include the Moving Average Convergence Divergence (MACD), the Stochastic Oscillator, and various sentiment indicators. These tools can aid in identifying overbought or oversold conditions, potential breakouts, or impending reversals, although they are not foolproof and can sometimes generate false signals. As such, traders often use leading indicators in conjunction with other analysis methods for more reliable forecasts.