Linear Regression Trendline

Linear Regression Trendline represents one of the most demonstrative and useful tools of technical analysis. It is the line built on price chart between two price points with the help of least-squares method. This trendline is the middle of channel, within which price moves. Also it is called called the line of equilibrium price. Deviation of price from that line demonstrates bulls' advantage on market, whereas its downward deviation speaks for bears' activity. Also trend of linear regression is used as a forecasting figure of direction of price tendency.

 

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