I want to understand the term "SLOPE"

In the 4 hour tunnel momentum method... the term slope is used. I haven't fully understood how do I recognize the slope and how to base my entry and exit decisions using a slope.

Also I want to know if i have to backtest.. how would I know whether the weekly direction was UP or DOWN ? Do I have to look at the weekly charts and decide?

How do I use the slope when I want to backtest ?

Go to the niche forum "Vegas Wealth Builder". In that forum you will see a sticky thread called "Lost in the Tunnel". Read that thread and look for posts by me (diallist). In those posts I describe a method called "Neutral Line" that I use to determine when the slope of the 8 SMA is positive, neutral or negative.

I'd give you the exact links to the relevant posts but I just don't have time right now.

Dial

Hi!
Since I was wondering the same thing before I read the docs, let me try to put it simple, first:
the 8 SMA that is used draws a line on the chart, yes? The direction it can go is Up / or Down \ or exactly sideways/neutral ---- okay?

If the SMA LINE (not the candles or bars) closes 1 pip or more higher than the line position at the time of the previous candle close, it will slope up, as it has to go up to connect to the new price, yes? Okay?

If the SMA LINE closes 1 pip or more lower than the LINE position of the previous candle time, it will slope down, as it has to go down to connect to the new price.

As for the neutral line/knowing where the price is that makes the slope neutral: since it's an average of 8 and on CLOSE, you go back 8 bars prior to the current one and look where bar price is at CLOSE of the bar. That's the price that will make the current slope/line go neutral.

Why? Imagine a stack made of 8 pieces of wood. Now, no matter which piece of wood you take away, to make the stack the same size, you need to add a piece of wood exactly the same size again. If the wood is bigger, the stack size goes up, if the wood is smaller, the stack size goes down.

And since we're using a MOVING average and the LAST candle always gets taken out of the stack, it's the price of the close of the last candle that's our wood size needed for identical or different stack size >>> slope change.

I hope that is a good analogy, it worked real well to help me visualize the idea

I was wondering from the first time I read the neutral line concept how it worked. I could not understand why the (current – 8) bar was the one that indicated the level for the slope change. The example with the wood stack is very successful. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o></o>

An easy way to determine the slope of a line is take an average of the price of several previous bars and subtract it from the current bar. If the result is say +1 it is a buy signal with the line pointing up, and if it is -1 it is sell with the line pointing down. The larger the result the more slope there is (movement) and the better the trading. It can be used with any indicator like SMA to determine the trend.

Would anyone have a suggestion as to what indicator would be pertinent to use for defining slope on specifically H4 and D1 charts?

Thanks
Wayne