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Random article: 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.

We always hear people saying to control our emotions and trade carefully but we never understand them until we realize what they mean in fact. Below we will discuss this issue in details. Consider an example where we know how emotions lead you to lose: Suppose you have $500 of capital and you are trading. You took a high risk and thus you have lost $200. What finally remained is $300, you get frustrated and open again with an even more risky trade. Again you lose and come to $100. By following the same pace, you will end with zero balance. Let's analyze. You started with capital of $500 and lost $200 with $300 remaining. Your intention is to recover losses immediately and this is what we call an emotion. You have only thought of recovering money and you do not even think whether that situation is suitable for opening a trade or not.

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