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Linear Regression Acceleration Analysis & Signals

Linear Regression Acceleration calculates the change in the regression line's gradient on the current price bar from its gradient from the previous price bar. The value used in calculating the linear regression is known as the normalized acceleration value which is plotted for each price bar formed on the price chart.

Linear Regression Acceleration Analysis - Linear Regression Acceleration Strategy

Linear Regression Acceleration

If normalized acceleration is 0.30, then regression line normalized slanting slope will be moving up at a rate of 0.30 per each price bar.

Similarly, a normalized slanting slope of -0.40 would indicate that the regression line normalized slanting slope is declining/falling at rate of -0.40 per each price bar.

For example, if the current price bar normalized slope value is 0.40 & the previous price bar normalized slanting slope reading is 0.20, then normalized acceleration of current bar would be calculated as 0.40 - 0.20 = 0.20.

Note: It is crucial to realize that a positive acceleration value does not equate to a positive slope value, it simply means the slope gradient is increasing. A negative acceleration value doesn't equate to a negative slope value, it simply means that the the slope's gradient is decreasing.

Implementation of the Linear Acceleration Regression Technical Indicator

The Linear Regression Acceleration indicator allows for the following; price choice, regression periods, smoothing of raw price before applying the regression and choice of the smoothing type.

Resulting regression slope is displayed as a bi-colored histogram that oscillates above & below 0.

reference line is set at the 0 mark.

  • A rising upward slope: (greater and higher than its previous value of one bar before) is displayed & shown in up slope color.
  • A declining/falling slope: (lower and lesser than its previous value of one bar before) is put to display using the down slope colour.

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