The Slope – How to use it to determine trend direction in the stock market
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“Slope.” An optimist might think of Aspen and skiing when confronted with the term, and math whizzes may fondly remember Junior High, but for the rest of us, the term takes us back to Geometry class: Slope = Rise over Run. Well, you’ve probably gone your whole life without using that tidbit of public-education knowledge — until now, that is… Slope is back!
This “Slope,” however, will help you make money. Yes, it uses the same “rise over run” principle, and it even throws in some linear regression for those who made it past Stats 101 in college, but the good news is that you don’t really have to understand the underlying math: whether you “get it” or not, Slope is easy to read, and makes identifying trend direction and strength a breeze.
In this episode, you’ll learn:
- What Slope is, how it’s calculated, and how you can use it — both from a practical standpoint (i.e., how to add it to your own charts) and from an interpretative standpoint (i.e., how to use it to make money!)
- How Slope can show determine trend direction even when the basic stock chart says something different — and there are examples of how using Slope could have made or saved you a lot of cash.
- How Slope can determine the strength of a trend: Say you know which way the market is heading, but is it likely to keep going that way? Slope can help you find out.
This video does this by taking in-depth looks at real-life examples. For instance, we study a Dow Jones Industrial Average chart that shows how Slope could have been used to rake in huge profits during the financial meltdown of ’08. You could have known when to buy, when to sell, when to short, and when to cover — Slope told you exactly when!
Slope may seem overly complex with all of its geometric terminology and linear regression, but in today’s day and age it’s easy to use — and after you see how you could have made big money in the examples in this video, you’ll probably never want to make another trade without it again.
Happy Trading!
Manny Backus
CEO, Wealthpire Inc.
P.S. In our next video, we’ll look at Bollinger BandWidth, which was a favorite of John Bollinger himself. See you next week!
Episode 72 — The Slope – How to use it to determine trend direction in the stock market
