Trade Gold Trading

Linear Regression Acceleration Analysis & Trading Signals

Linear Regression Acceleration technical indicator calculates changes in regression line's gradient on the present trading price candlestick from its slope from the previous trading price candlestick. The value used to calculate the linear regression is known as the normalized acceleration value which is drawn for each price bar formed & shaped on the chart.

XAUUSD Linear Regression Acceleration Described

Linear Acceleration Regressed

If normalized acceleration is 0.30, the normalized slope of the line will rise at a pace of 0.30 for each price bar.

Likewise, a normalized slope of -0.40 would mean the regression line's normalized slope is going down by -0.40 for each price bar.

For example, if the normalized slope value of the current price bar is 0.40 and the previous bar's slope is 0.20, the normalized acceleration will be calculated as follows: 0.40 - 0.20 = 0.20.

Important Note: It is vital to understand that a positive acceleration reading does not automatically signify a positive slope value: it merely indicates that the rate of change of the slope is increasing. Similarly, a negative acceleration reading does not imply a negative slope value: it simply means the slope gradient is diminishing.

Implementation of Linear Acceleration Regression Indicator

The Linear Regression Acceleration indicator affords users the ability to configure: the selection of the price period under observation, the number of regression periods, the smoothing applied to the raw trading price prior to regression implementation, and the choice of smoothing method.

The resulting regression slope is shown as a bi-colored histogram that fluctuates above and below zero.

The reference line is set at the 0 level mark.

  • A rising slope: (greater than its previous value of One bar before) is displayed in the up slope color.
  • A falling slope: (lower than that of its previous/prior value of one bar before) is shown using the downwards slope color.

Get More Courses and Tutorials:

Gold Broker