Why Slope and Angles Are Not Reliable in Stock Charts
Do not skew your chart analysis by falling into the slope-and-angle trap.
You invest $10k in two stocks.
The trades have great slopes and an almost perfect upward momentum angle
Both stocks are fundamentally strong with significant liquidity and correlated to the index
And the market indices are honking hot!
Here’s why not all dramatic looking trends on stock charts are equal:
Remember High School Geometry?
We are taught that slopes and angles provide important information about linear relationships because the axes were on the same scale.
But stock charts? They march to a different drummer: price on the y-axis, time on the x-axis. Totally different scales. And this mismatch? It wreaks havoc on those “dramatic” slopes and angles.
Why Slope ≠ Rate of Change
Here’s the kicker: in stock charts, slopes and angles don’t reflect reality the way they did in geometry class. They’re skewed by chart scaling. What looks steep or flat can be wildly misleading.
Focus on What Matters: Rate of Change
A VIP indicator designed for the job: Big Movers Indicator
This study focuses on price movement and momentum over time, cutting through the chart noise with weighted, time-adjusted data.
When Big Moves in the lower chart is over .2 the trend is a big mover.
the NVDA trend is never under .2 ---> big mover
the BAC trend is never above .2 ---> no big moves
Only Trade Equities That Are Big Movers!
VIP-ers: here is how:
https://usethinkscript.com/threads/identify-the-big-movers.20100/
Do not skew your chart analysis by falling into the slope-and-angle trap.
You invest $10k in two stocks.
The trades have great slopes and an almost perfect upward momentum angle
Both stocks are fundamentally strong with significant liquidity and correlated to the index
And the market indices are honking hot!
Here’s why not all dramatic looking trends on stock charts are equal:
Remember High School Geometry?
We are taught that slopes and angles provide important information about linear relationships because the axes were on the same scale.
But stock charts? They march to a different drummer: price on the y-axis, time on the x-axis. Totally different scales. And this mismatch? It wreaks havoc on those “dramatic” slopes and angles.
Why Slope ≠ Rate of Change
Here’s the kicker: in stock charts, slopes and angles don’t reflect reality the way they did in geometry class. They’re skewed by chart scaling. What looks steep or flat can be wildly misleading.
Focus on What Matters: Rate of Change
A VIP indicator designed for the job: Big Movers Indicator
This study focuses on price movement and momentum over time, cutting through the chart noise with weighted, time-adjusted data.
When Big Moves in the lower chart is over .2 the trend is a big mover.
the NVDA trend is never under .2 ---> big mover
the BAC trend is never above .2 ---> no big moves
Only Trade Equities That Are Big Movers!
VIP-ers: here is how:
https://usethinkscript.com/threads/identify-the-big-movers.20100/
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