Trends/Trend strength and direction

Moving average slope

How fast a moving average is rising or falling, as a percent per bar.

Trend strength and directionBest on 6M, 1Y, 3YAlso called MA slope
Moving average slope diagramIllustration of the moving average slope shape. It is a sketch, not real price data.Slope of 50-bar average
Illustration of the moving average slope shape. It is a sketch, not real price data.

What it shows

The slope of a moving average tells the direction and speed of the trend it follows. We take the 50-bar average, and compute its percent change over the last 10 bars.

A positive slope means the average is rising. A flat average shows a sideways market.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

  1. Compute the 50-bar SMA.
  2. Slope = (SMA today ÷ SMA 10 bars ago − 1) × 100.
  3. Plot the slope under the price.
  4. Mark zero.

Starting values: Average 50 bars; Window 10 bars. These are proposed and will be tuned on real price data before launch.

How to read it

  • The gray line is the 50-bar average.
  • The panel shows its slope.
  • Zero means flat.

Status labels you may see

LabelWhat it means
RisingSlope above +0.5%.
FlatBetween −0.5% and +0.5%.
FallingSlope below −0.5%.

What cancels it

Nothing cancels it.

What traders check next

  • Price relative to the average.
  • Length of time the slope has been positive.
  • Other averages.

Limits

  • Lags the price.
  • Thresholds are choices.
  • Depends on the average length.

Try it in forecastviz

  • Open any ticker and choose Trend strength and direction → Moving average slope in the left menu.
  • Switch between 6M, 1Y, 3Y to see how the picture changes.
  • Compare with Simple moving average and Linear regression slope on the same chart.

Questions

Why 10 bars?

A short window for the change.

Why check slope?

Price above a falling average is a different state than above a rising one.

Related trends

Further reading

  • Wilder, New Concepts in Technical Trading Systems
  • Chande and Kroll, The New Technical Trader
  • Hosoda, Ichimoku Kinko Hyo
  • Murphy, Technical Analysis of the Financial Markets
  • Kaufman, Trading Systems and Methods

Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.