Regression Line (RL)

Regression Lines are a straight-line description/simplification of price action. An RL is the “best fit” straight line of prices over the look back period. Moving regression lines are a curved line that is drawn by connecting the final point on the regression line on a rolling basis.  Moving regression lines adapt MUCH faster than traditional moving averages. Linear regression analyzes two separate variables in order to define a single relationship. In chart analysis, this refers to the variables of price and time. Traders who use charts recognize the ups and downs of price printed horizontally from day-to-day, minute-to-minute, or week-to-week, depending on the evaluated time frame. The different market approaches are what make linear regression analysis so attractive.