Linear Regression Slope CFD Technical Analysis and Linear Regression Slope CFD Signals
Linear Regression Slope indicator calculates the slope/gradient value of regression lines which involves the current cfds price bar & the previous n-1 cfds price bar (where n = regression periods)
This Indicator calculates this value and updates it for each cfds price candlestick loaded in the cfds price chart.
The Indicator is calculated from the Linear Regression CFDs Indicator. The linear regression plots the cfd trend of the cfds price chart over a specified duration of time and this market cfd trend is determined by plotting a Linear Regression CFD Trend Line using the "least squares fit" method. The slope of this cfd 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 cfd price
Linear Slope Regression = (raw value of slope * 100 / cfd price).
The smoothing of the slope values is essential when comparing markets which are volatile and trade within wide cfds price ranges for each cfds price candlestick. Smoothed slope value will show the percent change in the cfds price per every candle used to calculate the regression (best fit) line.
CFDs Technical Analysis & How to Generate CFDs Signals
- If the smoothing of the slope is 0.30, then the regression line is rising and 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 & 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 cfd signals is set at the 0 level.
- A rising slope (greater than the previous value of 1 candle ago) is displayed in the Blue/Upward Slope color,
- A declining slope (lower than the previous value of 1 candle ago) is displayed in the Red/Downward Slope color.
Technical Analysis in CFD Trading
