Linear Regression Acceleration Oil Technical Analysis and Trading Signals

Linear Regression Acceleration calculates the change in the regression line's gradient on the current crude oil price bar from its gradient from the previous crude oil price bar. The value used to calculate the linear regression is referred to as the normalized acceleration value which is drawn for each crude oil price bar formed on the crude oil price chart.

Linear Regression Acceleration

If normalized acceleration is 0.30, then the regression line normalized slope will be rising at the rate of 0.30 per oil price bar.

Similarly, a normalized slope of -0.40 would indicate that regression line normalized slope is declining at rate of -0.40 per oil price bar.

For example, if the current crude oil price bar normalized slope value is 0.40 and the previous crude oil price bar normalized slope value is 0.20, then the normalized acceleration of the current crude oil 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 gradient of slope is increasing. A negative acceleration value does not equate to a negative slope value, it simply means gradient of the slope is decreasing.

Implementation of Linear Acceleration Regression Technical Indicator

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

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

reference line is set at the 0 level mark.

• A rising slope: (greater than its previous value of One bar before) is displayed in up slope color.
• A declining slope: (lower than its previous value of One bar before) is displayed using the down slope color.