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hello everyone today I'm going to show
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you one of the most underrated technical
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analysis techniques that has completely
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transformed my trading which is
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calculating the moving average slopes um
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most Traders just look at whether the
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price is above or below a moving average
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but they're actually most missing a
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crucial information the angle of the
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moving average tells you everything
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about the momentum and the trend
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strength in today's video I'll show you
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exactly how I calculate these slopes
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using python you'll see how I use them
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to identify Trend strength spot
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potential reversals and make better
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entry and exit decisions
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I'll also walk you through some real
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life examples so you can see this
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technique in action if you want to stop
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getting faked out by false breakouts and
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start identifying real Trends with
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confidence this is the video for you so
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in if this is your first time here
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welcome my name is VI and I'm a
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financially independent Alo Trader this
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channel is all about building a
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community of algo Traders we discuss
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everything about Alo trading using
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python building and practicing trading
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strategies Market updates much more
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please do visit our community website
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trader.net Channel Fab weth where I talk
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about my own Financial Independence
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journey and share tools methods and
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strategies that help me achieve my
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Financial Freedom thank
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you the code that I'm about to walk
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through is as usual available on our
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community website fad. in you familiar
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with this so you can go into stories and
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you would find the the moving average
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slope the article is pretty detail it
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gives you entire account of how this
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works including the the actual code is
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embedded here and it also gives you a
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couple of real world examples and then
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most importantly it tells you how to
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interpret the values that comes out of
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the the the program itself right uh so
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how to understand how to interpret it
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how do you find out you know what trend
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the the particular stock is following
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can be made uh out from this one uh you
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don't have to worry I'll also provide
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the link uh to this blog article in the
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description as well as in the I'll put
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it on the comment section as well so you
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that now let's jump into the actual code
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itself um I don't want to keep a video
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short I don't want to spend a lot of
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time trying to explain what moving
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average is all about and all that
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because I'm pretty sure you're you're
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already aware of that uh so I'll jump
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right into the the code the code is
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pretty simple it takes uh three inputs
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one is your the stock code in this case
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I'm using yaho fan so you the second
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input it takes is what is the moving
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average window that you want in this
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case I've just kept 20 because since I'm
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considering daily candles here uh 20
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Maas is basically a good uh measure of
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ma to look at the third input is
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basically the Sleep uh the slope period
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how long do you really want to consider
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the data going back right in this case
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it's going back up to 30 trading
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sessions uh so it would basically
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calculate the moving averages for this
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30-day period and then based on that
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information it calculates slope so to
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make this code work you would have to
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install two dependencies one is numpy
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and the other is pyit learn pyit learn
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is again open source um I mean typically
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people use it for machine learning
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especially when it comes to if you want
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to work with classification regression
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or clustering is one of the best and
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Powerful tools available in the market
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so the way code works is uh we use a
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linear regression to figure out what the
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the slope of the moving average for the
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time period that we already mentioned
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and then it returns a slope value and
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then depending upon the slope value you
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can now figure out whether the trend is
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either very weak weak moderate or strong
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or very strong depending upon the value
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and also if it's positive it means it's
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an uptrend if it's a negative it is a
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downtrend so I'll give you a I'll show
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you a couple of examples on how this
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works for example in this one I've
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considered infosis infosis as we know uh
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has taken a nose dive here so if you
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look at the output the the moving
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average slope value is actually negative
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and it's showing a very strong downward
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Trend I'll also show you the the chart
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and and we can check whether the code is
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working fine so let's look at the
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infosis chart it said this is a daily
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candle here and then this line denotes
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the 30 candles 30-day U you know period
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that we're talking about and this is the
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20 EMA uh we can consider moving average
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EMA doesn't make a lot of difference
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here and this lellow line is basically
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the you know the the line that I drew
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which basically gives you an idea as to
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what the slope is which pretty indicate
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that it is a pretty downtrend look at
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the way it has taken a no dive here so
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that way the code seems to be working
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and then giving you the right results
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now let's take a look at another example
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this time what about the upend bonds for
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example baj finan is in the news all all
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the time is quite famous now uh this
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this uh when the entire Market seems to
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be going downhill B Finance seems to be
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like a racing horse you know so it's an
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interesting case so I've taken baj
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Finance here and then rest of the inputs
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remain the same and then when we run it
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we get a positive that 38 which is
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pretty steep and it's also showing a
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very strong upward Trend um based on the
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value right let's take a look at the
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now there you go that's the baj finance
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daily chart and and then this this line
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that I connected from the these 30-day
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start of the moving average to the end
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denotes the overall angle in the trend
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this stock is going which pretty much is
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very clear it's a very strong upward
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Trend so we've tested both scenarios
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with the code and the code seems to be
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well so that is how exactly the code
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works you can refer to the blog article
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where it explains how to basically uh
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infer the data the slope value or the
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angle uh and then accordingly how do you
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find out the trend so you can read
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through this blog article for more
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details so how I personally use this is
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basically I don't use this as a
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standalone indicator U you should never
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do as any good algor Trader would tell
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you you would have to use a Confluence
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of indicators do not take just one
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indicator and trade with it you
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typically look for information from
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multiple sources of indicators to ensure
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that you're you are in the right
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direction you're making the right trade
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right that increases your success of
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your trade uh to to a higher degree uh
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so I typically take this also into
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account whenever I'm getting into a
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trade for example if I'm getting into a
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long trade I would really want to check
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if the the slope of the moving averages
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are all aligned um in fact there are
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strategies that I use where I use
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multiple moving averages and then I
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check the slope of every moving averages
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to ensure that all of them are indeed
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pointing towards a particular direction
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that I want to you know take the trade
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into so that is one way I use it or
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sometimes if the the slope is very steep
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for in the case of the baj fin that we
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talked about I typically tend to avoid
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taking a rate because anything that has
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a very steep slope like that um tend to
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reverse you know with a with a Vengeance
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so Ty you'll have to be very careful so
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you can actually use this tool and
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multiple ways to ensure that you know
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your overall success of the trade
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improves in the next video I'll take
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this concept that I've just explained
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and then show you a small utility that
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can that can do a screening of any stock
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universe that you want and give you a
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list of top uptrending all the
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downtrending stocks from that Universe
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if you genuinely found this video useful
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please consider subscribing and liking
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the video and I will see you soon in
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another video and until then take care
