A technical indicator is a graphic representation of price action. Some technical indicators overlay on the trading chart, and some reside on the bottom of the chart.
Typically a technical indicator is just some type of oscillation of the price based on parameters that you set.
Using technical indicators can help you to filter out some of the noise of the price movement on the chart and get an idea of the bigger picture.
A few examples of technical indicators:
- Moving Averages
- MACD - Moving Average Convergence/Divergence
- RSI - Relative Strength Index
- CCI - Commodity Channel Index
There are many different types of technical indicators. They are not the holy grail of forex trading, but they are good way to to get an alternate view of the price.