Linear Regression Slope Technical Analysis Signals
Linear Regression Slope calculates the slope/gradient value of regression lines which involves the current price bar & the previous n-1 price bar (where n = regression periods)
This Indicator calculates this value & updates it for each price candle loaded in the price chart.
The Indicator is calculated using the Linear Regression Trading Indicator. The linear regression plots the trend of the market price price chart over a specified and given duration of time and this trend is determined by drawing a Linear Regression Trendline using "least squares fit" method. The slope of this trend-line is then calculated and this forms the linear regression.
Linear Regression Slope
The slope values are then smoothed by multiplying the raw slope indicator values by 100 & then dividing this value by price
Linear Slope Regression = (raw value of slope * 100 / price).
The smoothing of the slope values is essential when comparing markets which are volatile and trade within wide price ranges for each price candlestick. Smoothed slope value will show the percent change in the price per every candle used in calculating the regression (best fit) line.
Forex Technical Analysis and How to Generate Signals
- If the smoothing out of the slope is 0.30, then the regression line is rising and adjusting at a rate of 0.30 % for every candlestick.
- If the smoothing of the slope of -0.30, then the regression line is going downward & adjusting at the rate of -0.30% for every candlestick.
The regression slope is displayed as a bi-color histogram that oscillates above & below zero centerline. Center-Line which is used to generate signals is set at the 0 level mark.
- A rising slope (greater than the previous value of 1 candlestick ago) is displayed and shown in the Blue/Upwards Slope colour,
- A declining slope (lower than the previous value of 1 candlestick ago) is shown & displayed in the Red/Downwards Slope color.
Analysis in Forex Trading
Get More Topics and Tutorials and Lessons:
- How to Use ROC MetaTrader 5 Forex Technical Indicator
- Which Broker Do I Use to Trade Nikkei 225?
- Forex Trading TSI True Strength Index EA(Expert Advisor) Setup
- Buy Entry Limit Order and Sell Entry Limit Order
- What Time Does DowJones 30 Index Open?
- Chandes Momentum Oscillator MT5 Trading Indicator
- NKY225 Strategies Guide Lesson Download
- MetaTrader 4 History Center on Tools Menu on MT4 Platform
- Course Tutorial for Learning How to Practice XAU/USD
- Setting Up Commodity Channel Index(CCI) Expert Advisor(EA)
