Slopes

[subarashi]

Almost every column, book or advice about trading says that the steeper the slope of a trend line the more confidence you can have in it. That is perhaps the most erroneous piece of advice that you will ever read.

The angle of a slope is related to the aspect ratio of the image and has nothing to do with price action. Only Point and Figure charts, Kagi and Break charts have a meaningful slope because of the way they are constructed.

 

[£10kLoser]

It obviously refers to the slope relative to other slopes on the same chart scale, so it's not incorrect at all...

 

[nunrgguy]

It obviously refers to the slope relative to other slopes on the same chart scale, so it's not incorrect at all...

Absolutely. I'd also add that it's only true up to a point. If it's going vertical it's not going that way forever.

 

[thos]

Absolutely - and in this case the bend at the end is often a sharp drop, usually just after you buy it.

 

[tomorton]

Almost every column, book or advice about trading says that the steeper the slope of a trend line the more confidence you can have in it. That is perhaps the most erroneous piece of advice that you will ever read.

The angle of a slope is related to the aspect ratio of the image and has nothing to do with price action. Only Point and Figure charts, Kagi and Break charts have a meaningful slope because of the way they are constructed.

I agree - the gradient is irrelevant. I look for the number of breaches of a set measure, usually the 50EMA, to indicate strength of the trend.

 

[timsk]

Almost every column, book or advice about trading says that the steeper the slope of a trend line the more confidence you can have in it. That is perhaps the most erroneous piece of advice that you will ever read.

The angle of a slope is related to the aspect ratio of the image and has nothing to do with price action. Only Point and Figure charts, Kagi and Break charts have a meaningful slope because of the way they are constructed.

I'm just wanting to add that the part of subarashi's post I've quoted in bold is dependant upon one finding a charting provider that offers P&F charts with the correct 1:1 aspect ratio. That's not so easy. eSignal didn't in the days when I was with them. Now I'm with TradeStation and, unless I'm missing a trick somewhere (quite likely!) - they don't either. ShareScope do and are easily the best that I've found so far. I have wet dreams thinking that one day I'll use Updata who almost certainly offer this facility, but they're way out of my price range for now.
Tim.

 

[arabianights]

I have wet dreams thinking that one day I'll use Updata who almost certainly offer this facility

Does your wife know about this?

 

[subarashi]

I'm just wanting to add that the part of subarashi's post I've quoted in bold is dependant upon one finding a charting provider that offers P&F charts with the correct 1:1 aspect ratio. That's not so easy. eSignal didn't in the days when I was with them. Now I'm with TradeStation and, unless I'm missing a trick somewhere (quite likely!) - they don't either. ShareScope do and are easily the best that I've found so far. I have wet dreams thinking that one day I'll use Updata who almost certainly offer this facility, but they're way out of my price range for now.
Tim.

I agree with your point about the need for a 1:1 ratio. The best alternative is to construct P&F charts in a spreadsheet program.

 

["D"]

Hello Gentleman,

I believe Market Analyst Software out of Australia has a ratio lock in their Gann Edition. I took a pretty hard look at the software last summer and it seems like a real nice program, but I have no actual experience with it. Timsk, if it is acceptable, I can post the link to their home page.

 

[timsk]

Hi D,
Thanks for the offer, but I won't change to another data provider just on the strength of this. It's important for a trader who makes use of bullish support and bearish resistance lines - but I don't!
Cheers,
Tim.

 

[Dentalfloss]

tim
the correct aspect ratio is 4:3
1:1 means,i think,that the "x" and "o" s are correctly formed.i.the "o" s are not squat/elongated.
there is a way round this....resize the chart,either by width and possibly by height.to get the correct looking "x " and "o" s.if the correct formula is applied to the data,then the charts should be fine.the only way to do this is to check them out against other software with the same box size and also by looking at the candlestick
the problem is that most software just processes the data having no regard to the presentation

I'm just wanting to add that the part of subarashi's post I've quoted in bold is dependant upon one finding a charting provider that offers P&F charts with the correct 1:1 aspect ratio. That's not so easy. eSignal didn't in the days when I was with them. Now I'm with TradeStation and, unless I'm missing a trick somewhere (quite likely!) - they don't either. ShareScope do and are easily the best that I've found so far. I have wet dreams thinking that one day I'll use Updata who almost certainly offer this facility, but they're way out of my price range for now.
Tim.

 

[The Artist]

Almost every column, book or advice about trading says that the steeper the slope of a trend line the more confidence you can have in it. That is perhaps the most erroneous piece of advice that you will ever read.

The angle of a slope is related to the aspect ratio of the image and has nothing to do with price action. Only Point and Figure charts, Kagi and Break charts have a meaningful slope because of the way they are constructed.

Im actually not sure I disagree with the logic of that statement in bold.
No matter what aspect ratio you have, the slope is a fixed number. As in, a low of $1 at hour 0 to a low of $2 at hour 1 gives you a $1/hr slope. $1/hr can indeed look very steep or very flat depending on the aspect ratio, but the statement just focuses on the slope, not on the way people assimilate it with the actual angle of the line.
So I think you disagree with how the appearance of the slope is interpreted rather than with the slope itself.
Unless Im mistaken.

 

[thos]

Im actually not sure I disagree with the logic of that statement in bold.
No matter what aspect ratio you have, the slope is a fixed number. As in, a low of $1 at hour 0 to a low of $2 at hour 1 gives you a $1/hr slope. $1/hr can indeed look very steep or very flat depending on the aspect ratio, but the statement just focuses on the slope, not on the way people assimilate it with the actual angle of the line.
So I think you disagree with how the appearance of the slope is interpreted rather than with the slope itself.
Unless Im mistaken.

I can see a certain logic. If you equate slope with angle of attack then the chances are fairly good that you can get your stop above breakeven quickly before the bubble bursts. On the other hand you might not get out for your stop price. Slope in P&F is a different thing and means rises with fewer reversals (it does not matter how deep).

 

[timsk]

tim
the correct aspect ratio is 4:3
1:1 means,i think,that the "x" and "o" s are correctly formed.i.the "o" s are not squat/elongated.
there is a way round this....resize the chart,either by width and possibly by height.to get the correct looking "x " and "o" s.if the correct formula is applied to the data,then the charts should be fine.the only way to do this is to check them out against other software with the same box size and also by looking at the candlestick
the problem is that most software just processes the data having no regard to the presentation

Hi dentist007,
You've confused me now - 'tis easily done! I'll have to quiz you on this tomorrow. Looking forward to meeting you!
Cheers,
Tim.

 

[zambuck]

tim
the correct aspect ratio is 4:3
1:1 means,i think,that the "x" and "o" s are correctly formed.i.the "o" s are not squat/elongated.
there is a way round this....resize the chart,either by width and possibly by height.to get the correct looking "x " and "o" s.if the correct formula is applied to the data,then the charts should be fine.the only way to do this is to check them out against other software with the same box size and also by looking at the candlestick
the problem is that most software just processes the data having no regard to the presentation

If I have understood your comments correctly, then my comments below...

Only exception to this was Indexia...I should say 'is' as I still use it in DOS format....

What Jeremy did for P & F was that he has boxes which enclosed either O and X...and therefore the trend lines were always at 45degrees.....and aspect ratio therefore is 1:1

However neither Metastock or even tradestation actually did construct P & F charts in it's correct graphic format...!

 

[kwickwool]

Am I missing something here? Let go back to basics, regardless of aspect ratio of the image it is relative to what you are seeing on the screen compared with other slopes? If the price is going up fast the slope is sharper, if the price is not going so fast less of a slope. This is comparable to other slopes on the chart.

If you look on it all from a relative perspective as you should as each software is ddiferent then you will not go too wrong will you?

 

[montmorencyt2w]

Almost every column, book or advice about trading says that the steeper the slope of a trend line the more confidence you can have in it.

Does it? Maybe I've not read enough trading books, but in any case, I wouldn't believe it.

I think I'd prefer to see something approximating to around 45°. Anything significantly above this I would consider unsustainable, and anything significantly below might not be much of a trend.


I have to say that, having started off as a "trend follower", I am now pretty sceptical about the whole business, plus a lot of other things I've "learned" along the way.

 

[Black Swan]

Does it? Maybe I've not read enough trading books, but in any case, I wouldn't believe it.

I think I'd prefer to see something approximating to around 45°. Anything significantly above this I would consider unsustainable, and anything significantly below might not be much of a trend.


I have to say that, having started off as a "trend follower", I am now pretty sceptical about the whole business, plus a lot of other things I've "learned" along the way.

The trend's not your friend atm then eh?

 

[montmorencyt2w]

The trend's not your friend atm then eh?

No longer my special friend, no

 

[thos]

The trend's not your friend atm then eh?

Friends are supposed to stick with you. A friend will agree to meet at a certain place at a certain time and will be there. A friend does not go off on some other road with a bimbo just because they got bored.