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Linear Regression Gold Trading Analysis and Linear Regression Gold Trading Signals

Another name for a regression line is a line of the best fit/best fit line. This indicator plots the gold trend of the xauusd price over a specified duration of time. The market gold trend is determined by calculating a Linear Regression Gold Trend Line using the "least squares fit" method. This method helps to minimize the distance between the xauusd price data points and the line of best fit.

Linear Regression XAUUSD Indicator

Unlike the straight Regression Trend-Line indicator, the indicator plots the end values of multiple Linear Regression trend-lines. Any single point along the Linear Regression will be equal to the end value of a Regression Trend-line, but the resulting gold trend line looks like the Moving Average.

But unlike the Moving Average, this indicator does not show as much delay since it is fitting a line onto data points rather than averaging them.

The Linear Regression is a prediction of the tomorrow's xauusd price drawn today, one day before. When the gold prices are steadily higher or lower than the forecast gold price, then a Gold trader can expect them to quickly return to more realistic fore-casted levels.

In other terms, this indicator shows where the chart gold prices "should" be trading based on a statistical basis and any disproportionate deviation from the regression line is likely to be short-lived.

XAUUSD Trading Analysis and Generating XAUUSD Trading Signals

This indicator allows for xauusd price selection, adjusting number of periods and smoothing of xauusd price data before applying the calculation and the selection of smoothing type.

This indicator looks like a moving average but it has a bi-color representation.

  • Bullish Signal (Blue color) - A rising line (greater than its previous value 1 previous bar before) is displayed in the up gold trend blue color, while

  • Bearish Signal (Red color) - a declining line (lower than its previous value 1 previous bar before) is displayed in the down gold trend red color.

Linear Regression XAUUSD Indicator

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