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Linear Regression Acceleration Technical Analysis & Signals

The Linear Regression Acceleration indicator operates by assessing changes in the slope of the regression line between the current price bar and the previous candlestick's slope. The value used to determine the linearity is referred to as the normalized acceleration value, which is then plotted for each stock price bar that appears on the chart.

Linear Regression Acceleration Indicator - Linear Regression Acceleration Indicator Analysis

Linear Acceleration Regressed

If the normalized acceleration is 0.30, then the slope of the regression line will increase at a rate of 0.30 for each price candlestick.

Likewise, if a normalized slope is -0.40, it means the regression line's normalized slope goes down by -0.40 for each price candlestick.

Say the current candlestick's slope is 0.40 after normalizing. The last one was 0.20. Subtract them to get the bar's acceleration: 0.20.

Note: Keep in mind that a positive acceleration does not mean a positive slope. It just shows the slope is getting steeper. A negative acceleration does not mean a negative slope. It means the slope is flattening out.

Implementation of Linear Acceleration Regression Trading Indicator

The Linear Regression Acceleration lets you pick a stock price, how long to look at past data, smooth the price before using the regression, and pick a smoothing style.

The resultant regression trajectory is portrayed as a histogram exhibiting two colors, oscillating above and below the zero line.

The reference line is set at Zero mark.

  • A rising upward slope: (greater than that of its previous/prior value - of 1 bar before) is displayed in up slope color.
  • A declining slope: (lesser than that of its previous value - of 1 price bar before) is revealed using the downwards slope colour.

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