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Linear Regression Slope Analysis and Linear Regression Slope Trade Signals

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

This Indicator computes and updates this value for each XAUUSD price candle displayed in the price chart.

This indicator comes from the linear regression tool. That tool draws the price chart's trend over a set time period. It uses a linear regression line based on the least squares fit method. The line's slope gets measured next. That slope creates the full linear regression.

MT4 Linear Regression Slope Technical Indicator - Place Linear Regression Slope Indicator in Chart

Linear Regression Slope

The slope values are then smoothed by multiplying the raw slope indicator values by 100 & then dividing this value by price

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

Smoothing slope values helps in volatile markets with wide gold price ranges per candle. The smoothed slope shows percent change in price for each candlestick in the regression line.

XAU/USD Analysis and Generating Signals

  • If the smoothing out 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 out 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 visually presented as a histogram featuring two colors, which fluctuates above and below the horizontal zero centerline. This centerline, crucial for signal generation, is fixed at the 0 mark.

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

Linear Regression Slope XAUUSD Indicator - MetaTrader 4 Linear Regression Slope Technical Indicator

Analysis in XAU/USD Trading

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