Stock Price Angle of Ascent

[matthewlouis]

Hello Experts, I am trying to calculate the angle of ascent of stock prices as I am looking for an alert once that angle is over 45 degrees. Is that what the slope formula calculates using price and time? Do I then need to convert the slope to degrees?

Thanks in advance!

 

[t0azt]

Ok, I think I have a better understanding of what you are saying now. A slope of 1 is 45 degrees a slope of -1 is -45 degrees (or 315). So anything outside of that range would give you the alert you need or am I still not understanding you correcly?

 

[matthewlouis]

Oh, I see. Here's an example using the Slope formula.

Example: SLOPE(8/21/17:10/18/17,2430:2564) = 0.45

On a chart, that ascent sure looks like 45 degree angle . . . so is THAT what the slope formula is measuring?

If 1 = 45 degrees, then does that mean 0.45 * 45 = 20.25 or 20 degrees?

 

[t0azt]

Not quite. Theres trig and triangles involved which I have forgotten since 8th grade... The slope of a line given two points is the change in y divided by the change in x so if you have two points (0,0) and (1,1) the slope is (0-1)/(0-1)=-1/-1=1. that is the slope of the line that connects those two points. The angle of that line relative to the x axis is 45 degrees. If the slope is greater than 1 then the angle is greater than 45 (you need trig to figure out what it is exactly). So in the example you gave your points are (8/21/17,2430) and (10/18/17,2564) changing those dates to numbers in excel gives (42968,2430) and (43026,2564) so to calculate slope you do (43026-42968)/(2564-2430)=134/58=2.310ish. That line is more than 45 degrees relative to the x axis.

You can't base the degree on the angle on what you see on your graph because you can stretch it and have different increments of x and y values on your axes and this distorts the way it looks. If the increments on your y axis are 1,000s the line will look a lot flatter than if the increments were by 10s.

So what I am saying in my previous post is that any time your slope between two points is greater than 1 or less than -1 you have an angle that is more than 45 degrees. The slope to degrees relationship is not linear so having a slope of 2 doesnt mean you have a 90 degree angle.

 

[matthewlouis]

Wow! Great explanation. I see, t0azt. Let me process this. I like what did with the dates numerically, that makes sense. Yes, that's all I want to know -- if an angle is > 45% or when it goes beyond -45%. Thank you so much, I may be back -- bu tI think you done a great job explaining.

Thank you, thank you.

 

[matthewlouis]

Hey, the Excel formula SLOPE is = SLOPE(a2:a45,d2:d45). It doesn't say (a2-a45)/(d2-d45). ??

 

[t0azt]

The slope formula will do some other sorcery (math) when you have a range that contains more than 2 x values and more than 2 y values to calculate linear regression across all the points. Given that you are looking at stock prices you'd be better served, in my opinion, by looking at data other than the slope of the lines on a graph. Like shg pointed out an increase/decrease of more 1 dollar in 1 day will give you an angle greater than 45 degrees regardless of the price of that stock. % change is a better indicator of a stock's performance than what you are trying to do.

 

[matthewlouis]

OK, great, THANKS FOR ALL YOUR HELP!!! I'll do that %.