Linear Regression Indicator

The Linear Regression Indicator is used for trend identification and trend following in a similar fashion to moving averages. It should not be confused with Linear Regression Trendlines which are straight lines fitted to a data series.

Linear Regression Indicator

The Linear Regression Indicator is used for trend identification and trend following in a similar fashion to moving averages. 

 


Interpretation of Linear Regression Indicator

The Linear Regression Indicator plots the end points of a whole series of linear regression lines drawn on consecutive days. The advantage of the Linear Regression Indicator over a normal moving average is that it has less lag than the moving average, responding quicker to changes in direction. The downside is that it is more prone to whipsaws.

The indicator should not be confused with Linear Regression Trendlines which are straight lines fitted to a series of data points.



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