Using the Average Slope as a Trading Indicator

Taking Advantage of Steepness to Find Trading Signals in Python.

Finding signals and patterns inside a random-like market is not an easy job and as such, one has to seek out every possible way to analyze the markets and combine the good analyses into more complete ones. We can use insights from statistics such as averages and volatility, or insights from geometry such as the slope which we will see in this article, and even famous numbers such as the Fibonacci sequence. The first part will present the definition of the slope and how to calculate it, then, we will quickly see the concept of moving averages before creating the Steepness Indicator that will be later used in the back-testing part.

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