Slope Direction Line: A Moving Average Trend Indicator

Summary

The Slope Direction Line is described as a colored moving average intended to show the market’s average direction. Its configurable inputs are a lookback period, a moving-average method, and the price series used in the calculation. The calculation first forms a vector by doubling a moving average over half the period and subtracting a moving average over the full period. It then applies the selected moving-average method to that vector using the square root of the period as the smoothing length.

This description explains the indicator’s construction, but it does not specify entry or exit rules, how color changes are determined, or how the signal should be combined with other analysis. It provides no chart examples, market-specific guidance, backtest results, or evidence that the indicator predicts returns. Traders would need to define and test a separate decision process before using the line as part of a strategy.

Key ideas

• The indicator uses a colored moving average to represent average market direction.
• Its inputs are a calculation period, a moving-average method, and an applied price.
• The intermediate vector doubles a half-period average and subtracts a full-period average.
• The final line smooths that vector over a square-root-based period.
• The description supplies no trading rules or evidence of predictive performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.