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# Concept of Slope/Angle in indicators

April 16th, 2012, 02:57 PM   #1 (permalink)

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@Fat Tails, I have added this paragraph to the wiki:

The general idea is that on a dynamic scale (your chart x,y axis) there is no relative way to measure angles, as it depends on the height and width of your chart window, and the minimum and maximum prices displayed within the visible area. In short, measuring angles or slopes is not possible in this context.

I hope you can confirm I am correct, as that is just my interpretation and understanding. Please edit the article if I am wrong.

Thanks to @NJAMC as well.

Mike

April 16th, 2012, 03:58 PM   #2 (permalink)

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Big Mike
 @Fat Tails, I have added this paragraph to the wiki: The general idea is that on a dynamic scale (your chart x,y axis) there is no relative way to measure angles, as it depends on the height and width of your chart window, and the minimum and maximum prices displayed within the visible area. In short, measuring angles or slopes is not possible in this context. I hope you can confirm I am correct, as that is just my interpretation and understanding. Please edit the article if I am wrong. Thanks to @NJAMC as well. Mike

@Big Mike, @NJAMC. I agree with the text.

The point is that an angle on a price chart has always represented price change or momentum. If alpha is the angle than we all know that tan (alpha) = price change / time interval. Angles can be compared if both the price scale and the scale of the time axis are invariant, as was the case with printed charts. Modern software allows you to compress the time axis, or even uses a non-linear time axis, as is the case for tick, volume, range and Renko charts when used with equidistant bar spacing. Moreover, if the price axis can be set to Autoscale, a growing or declining momentum maybe visually compensated by the charting software, which in turn makes the concept of angles obsolete for describing price action.

April 16th, 2012, 04:05 PM   #3 (permalink)

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what are you trying to accomplish?

@Fat Tails & @Big Mike,

I think I want to add a section to this Wiki on "what are you trying to accomplish"?

I think one of your recent posts:

The key part here is:
If we want to define a neutral zone for the slope, we have to check the slope against volatility. This can be done by using any measure for volatility, for example

-> average true range
-> average range
-> standard deviation

I think what people are saying if there is a "small angle", the the movement in neutral. I think that might help the illustration of Angle being bad as it means nothing (a fixed reference only for this one case maybe). What the trader is trying to determine is "Is this movement meaningful". Your concept of "neutral zone" in my mind is "this movement is meaningless".

I think it fits in this Wiki, but don't know if we should start a different one? Seems connected in concept to many things not just Angle, but when I first started thinking angle, I wanted to know if there was significant movement.

 Nil per os -NJAMC [Generic Programmer] LOM WIKI: NT-Local-Order-Manager-LOM-Guide Artificial Bee Colony Optimization

 April 16th, 2012, 04:46 PM #4 (permalink) Fat Tails  Elite Member Berlin, Europe   : Advanced : NinjaTrader, MultiCharts : Interactive Brokers : Keyboard     Posts: 9,525 since Mar 2010 Thanks: 4,213 given, 24,795 received Movement is momentum. Momentum can be compared to volatility. If momentum is small compared to volatility, then we have barb wire market. If momentum is large relative to volatility then the market is trending. Volatility is smaller time frame momentum, and can be measured via the average range, the average true range or standard deviation. Things are quite simple.

April 16th, 2012, 04:53 PM   #5 (permalink)

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Fat Tails
 Movement is momentum. Momentum can be compared to volatility. If momentum is small compared to volatility, then we have barb wire market. If momentum is large relative to volatility then the market is trending. Volatility is smaller time frame momentum, and can be measured via the average range, the average true range or standard deviation. Things are quite simple.

Dear Fat Tails,
Is that possible to give an example of above .... Thank you in advance for your kind reply.
Best Regards
Dimitri

April 16th, 2012, 05:29 PM   #6 (permalink)

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dimitri
 Dear Fat Tails, Is that possible to give an example of above .... Thank you in advance for your kind reply. Best Regards Dimitri

Hi @dimitri,

This discussion area is for the Wiki posting. Would you mind starting a thread on the forums for this posting? You may want to search as I think there are several "Angle/Slope" discussions or start a new one around Momentum & Volitility.

 Nil per os -NJAMC [Generic Programmer] LOM WIKI: NT-Local-Order-Manager-LOM-Guide Artificial Bee Colony Optimization

 March 13th, 2015, 06:30 AM #7 (permalink) MT4Survivor  Elite Member Frankfurt Germany   : Intermediate : MetaTrader, MultiCharts : Forex, ES, GC, strange synthetic creatures   Posts: 11 since Nov 2014 Thanks: 13 given, 9 received I added some more information regarding the formula and its short comings when comparing slope values of different charts/instruments. Peter
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