Linear Regression Acceleration Technical Analysis & Signals

Linear Regression Acceleration indicator calculates changes in regression line's gradient/slope on the ruling trading price bar from its gradient/slope from the previous trading price candlestick. The value used in calculating the linear regression is referred to & known as the normalized acceleration value which is drawn for each trading price bar formed on the chart.

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 slope of -0.40 would indicate that regression line normalized slope is falling at rate of -0.40 per price candlestick.

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

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

Implementation of Linear Acceleration Regression Indicator

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

The resulting regression slope is shown as a bi-colored histogram which oscillates above and below 0.

The reference line is set at 0 level mark.

• A rising upward slope: (greater and higher than that of its previous/prior value of 1 bar before) is displayed and shown in up slope color.
• A declining/falling slope: (lower and lesser than that of its previous/prior value - of 1 bar before) is shown using the down slope colour.

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