Estimating Trend Strength from the Slope of an Exponential Moving Average
Summary
The indicator estimates the direction and strength of a trend by measuring the change in an exponential moving average over a chosen lookback. It calculates the moving average, compares its current value with an earlier value, adjusts the difference by pip size and the number of bars, and applies an arctangent transformation. The resulting series is plotted as a histogram around zero, with positive and negative values colored differently.
The example uses a ten-period moving average and a twenty-bar comparison interval. Larger absolute readings are presented as stronger trends or faster market movement. However, the document supplies no validation, trading rules, or performance evidence. The output’s scale and interpretation may depend on instrument units and implementation details, so it should not be treated as a standardized angle without further specification.
Key ideas
- The indicator infers trend direction from the change in an exponential moving average over a lookback window.
- It scales the moving-average difference by pip size and lookback length before applying arctangent.
- Positive and negative readings distinguish upward from downward movement.
- The document proposes magnitude as a measure of trend strength or market speed but gives no empirical validation.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.