Linear Regression Slope Stocks Technical Analysis & Linear Regression Slope Stocks Signals

Linear Regression Slope indicator calculates the slope/gradient value of regression lines which involves the current stocks price bar and the previous n-1 stocks price bar (where n = regression periods)

This Indicator calculates this value and updates it for each stocks price candlestick loaded in the stocks price chart.

The Indicator is calculated from the Linear Regression Stock Technical Indicator. The linear regression plots the stocks trend of the price chart over a specified duration of time and this market stocks trend is determined by plotting a Linear Regression Stocks Trend Line using the "least squares fit" method. The slope of this stocks 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 and then dividing this value by the stocks price

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

The smoothing of the slope values is essential when comparing markets which are volatile and trade within wide stocks price ranges for each stocks price candlestick. Smoothed slope value will show the percent change in the stocks price per every candle used to calculate the regression (best fit) line.

Stock Technical Analysis and How to Generate Signals

• If the smoothing of the slope is 0.30, then the regression line is rising & adjusting at a rate of 0.30% for every candle.
• If the smoothing of the slope of -0.30, then the regression line is going down and adjusting at a rate of -0.30% for every candle.

The regression slope is displayed as a bi-color histogram that oscillates above & below zero center-line. Center line that is used to generate stock signals is set at the 0 level.

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

Technical Analysis in Stock Trading