Risk Disclosure

Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. View full risk disclosure.

Indicator Change In Slope


The Indicator Change In Slope solver determines if the slope of an indicator is continuing to increase, starting to decrease, or reversing.

This solver is useful for detecting when an oscillator or moving average is starting to roll over and reverse direction.  For example, when the Stochastic is rising, the closer it gets to 100, the rising slope will begin to flatten out or roll over before it reverses down.  The video below will explain in more detail.

Parameters

This section is common to all solvers.  A description can be found here.
This section is common to all solvers.  A description can be found here.

Input

Select the type of data you want the solver to analyze.  e.g. To compare price data select Price.  To compare an indicator plot against something else select Indicator Value.  For a detailed explanation, see the section on Data Type Selection.

Output

Change In Slope graph

#1)  Sets the solver’s Long output value when the Indicator’s slope is up and the rising slope is increasing in the upward direction, in comparison to the previous bar slope.  Sets the Short output value when the slope is down and the falling slope is increasing in the downward direction. in comparison to the previous bar slope.

#2) Sets the solver’s Long output value when the Indicator’s slope is rising and the rising slope starts to decrease(or flatten), when compared to the previous bar slope. Sets the Short output value when the slope is falling and the falling slope starts to increase (or flatten), when compared to the previous bar slope.

#3) Sets the solver’s Long output value when the Indicator’s slope is rising and the rising slope starts to decrease(or flatten) for a second bar or more, when compared to the previous bar slope. Sets the Short output value when the slope is falling and the falling slope starts to increase (or flatten) for a second bar or more, when compared to the previous bar slope.

#4) Sets the solver’s Short output value when the Indicator’s slope is rising and the rising slope starts to decrease(or flatten) for a second bar or more, when compared to the previous bar slope. Sets the Long output value when the slope is falling and the falling slope starts to increase (or flatten) for a second bar or more, when compared to the previous bar slope. This sets the opposite output for In Direction But Greatly Turning condition.

#5) Sets the solver’s Short output value when the Indicator’s slope is rising and the rising slope starts to decrease(or flatten), when compared to the previous bar slope. Sets the Long output value when the slope is falling and the falling slope starts to increase (or flatten), when compared to the previous bar slope. This sets the opposite output for In Direction But Turning condition.

#6) Sets the solver’s Short output value when the Indicator’s slope is rising and the rising slope is increasing in the upward direction, in comparison to the previous bar slope. Sets the Long output value when the slope is falling and and the falling slope is increasing in the downward direction. in comparison to the previous bar slope. This sets the opposite output for Strong In Direction condition.

Video Tutorial

This video is from our weekly Workshop on April 4th, 2015.
For more benefit please watch in full screen mode, as this video is recorded in HD.


Examples


Example 1: The Basics

This demonstrates the basic function of Indicator Change In Slope solver with the use of the Stochastic D.  This Solver will be used to measure strength in the Stochastic D by comparing the current slope to the previous bar’s slope.  When the slope continues to increase in the same direction it is considered Strong In Direction.  If the slope begins to decreases in rate the first bar is considered In Direction But Turning.  Any bar afterwards is considered In Direction But Greatly Turning until the slope reverses direction.

  • Add the Indicator Change In Slope solver.

The chart below has a multi colored Stochastic D overlaid on price, and an indicator representing the slope of the Stochastic D.  Notice how the Solver output of 1 coincides with the continuous slope increase whether it is to the down side or up side.  And, when the slope rate decreases the output decreases until the slope reverses.

Example 2: Cycle Warning

This example checks the slope condition of the HMA and the Stochastic D cycle position to create a warning condition. The Indicator Change In Slope solver checks the HMA for a possible reverse in direction. As a filter, the Indicator Threshold solver will check the Stochastic D for an over sold or over bought condition.

  • Add the Indicator Change In Slope solver.
  • Set the Indicator to HMA 17 period.
  • Set Output 1), 2), & 3) to 0
  • Set Output 4) to 1
  • Set Output 5) to 0.5

  • Add the Indicator Threshold solver.
  • Set the Indicator to Stochastic using the default settings
  • Set Thresholds to the following: A = 80, B = 80, C = 50, D = 20 & E = 20
  • Set Long Output At E to 1
  • Set Short Output At A to 1

The chart below has a multi colored Stochastic D overlaid on price with 20 & 80 gray dashed lines, and a white HMA 17 period. Notice how a warning signal only occurs when the Stochastic reaches an extreme condition, and the chop in the middle of the chart is ignored.