Trade Stock Indices

Linear Regression Slope Technical Analysis & Linear Regression Slope 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 computes the value and refreshes it for each new candle on the chart.

The tool is figured out from the Linear Regression Indicator. Linear regression plots the trend of the trading price chart over a set time, and this trend is found by plotting a Linear Regression Trendline using the "least square fit" way. The direction of this trend-line is then worked out, and this is the linear regression.

Linear Regression Slope Technical Indicator - Linear Regression Slope Indicator Analysis

Linear Regression Slope

Smooth the slope values by multiplying raw slope indicator numbers by 100. Then divide by the trading price.

Linear Slope Regression = (raw value of slope * 100 / price).

The smoothing of the slope values is essential when comparing markets which are volatile & trade within wide trading price ranges for each price candle. The smoothed slope value will show the % change in the trading price per every candlestick used in calculating the regression (best fit) line.

Stock Technical Analysis and How to Generate Trading 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 out of the slope of -0.30, then the regression line is going downward and adjusting at a rate of -0.30% for every candlestick.

The regression slope shows up as a two-color histogram, moving above and below the zero line. The centerline for signals sits right at zero.

  • A rising slope (greater than the previous value of 1 candlestick ago) is displayed in the Blue/Upwards Slope color,
  • A declining slope (lower than the previous value of 1 candlestick ago) is displayed in the Red/Downwards Slope color.

Linear Regression Slope Indicator - Linear Regression Slope Index Technical Indicator Analysis

Technical Analysis in Indices Trade

Learn More Lessons and Tutorials and Courses:

Stock Index Broker