Slope() value

[EthanHunt]

I am using the function LinRegSlope() or similarly Slope(LinReg()). When I output the the values they are typically around -.05 to .05. I'm wondering what the highest and lowest these values could go. I'm also trying to relate these values to what I know as the slope of a line in geometry (typically 45 degree, 90 degree [straight up] etc.). I was thinking .45 would correspond to 45 degree line (slope) but that doesn't seem to be the case. Can somebody help me make sense of the values that Slope() outputs as they relate to high, low and the angle of a line. Much thanks.

[NinjaTrader_AdamP]

Ethan,

Slope just outputs the value in units price per bar so to speak. It's simply something like :

(Price[index2] - Price[index1] )/ (index2-index1)

As such the bounds on what it can output is highly dependent on the underlying series that its being calculated for. If you convert this to degrees or radians you could theoretically get between -90 and 90 degrees (but not including -90 or 90).

Slope actually can have some scaling issues if you don't normalize for volatility or something similar like ATR. Also the slope isn't based on the angles you see on your chart, i.e. if you rescale the chart by dragging the axes the slope doesn't change.

You may want to consider doing something like :

Arctan( (Price[0] - Price[1] ) / Timeframe )

This would return the value in radians, then you can simply convert to degrees. It also takes into account the time between one bar and the next.

I believe this would be similar :

Arctan ( Slope(Close,index1,index2) / timeframe )

Using some trigonometry :

Tangent ( angle ) = (Price[index2] - Price[index1] ) / (index2 - index1)

So taking the inverse function :

angle = Arctangent ( (Price[index2] - Price[index1] ) / (index2 - index1) )

Please note this is all pseudo-code / formulas. Math.ATan() is the method you can use for arctangent (inverse function for tangent) in C#.

[NinjaTrader_AdamP]

Ethan,

I have attached a screenshot I drew some things on that may help in understanding.

[EthanHunt]

Thanks for your responses Adam. I am not a Trig expert (took it in High School a long time ago). I like your chart and I see your formula. I like the circle with the degrees/angle line--THAT IS WHAT I'M TRYING TO CALCULATE. Are you saying take P2-P1/T2-T1 and normalize that somehow. I agree with the basic formula but don't see how to normalize it. Can you provide the actual code that would normalize. You say all pseudo-code / formulas but Math.ATan() is what I would use. What is the actual code to accomplish this? Thanks.

[NinjaTrader_Joydeep]

Hello EthanHunt,
Please refer to this post which demonstrates how to calculate the angle in degrees.

http://www.ninjatrader.com/support/forum/showpost.php?p=12715&postcount=5