Linear Regression Indicator
Platform: MT4 Type: Trend Last update: September 29, 2024The Linear Regression Indicator for MT4 plots a highly sensitive moving average line that quickly responds to price action shifts and movements. The traditional moving averages tend to be lagging and produce late trading signals. That’s why the Linear Regression comes in handy for many forex traders.
It uses better calculations, creating a formula that provides accurate trend momentum readings and better forex entry and exit points. One of the main advantages of the Linear Regression Indicator is its fast adaptation to price trends, which makes it especially attractive for forex scalpers.
Trading rules for linear regression indicator
This version of the Linear Regression Indicator plots a line that changes color depending on the direction of the trend and momentum. It plots a green line to indicate a bullish momentum, a red line to indicate a bearish momentum, and a yellow line to indicate a possible market reversal or market indecision. Generally speaking, it’s a good trend/momentum indicator, but we suggest using it in conjunction with some other technical analysis tools.
Buy Signal
Follow these steps for a long trade:
- The Linear Regression Moving Average turns green
- Price swings higher from recent low swing
- Buy trade is triggered after the above conditions are met
- Set stop loss a few pips below the last low point of the market
- Take profit or exit trade whenever the Linear Regression turns yellow (early sign or possible reversal) or red or use your own preffered method of trade exit
Sell Signal
Follow these steps for a short trade:
- The Linear Regression Moving Averages turns red
- Price swings lower from recent high swing
- Sell trade is triggered after the above conditions are met
- Set stop loss a few pips above the last high point of the market
- Take profit or exit trade whenever the Linear Regression turns yellow (early sign or possible reversal) or green or use your own preffered method of trade exit
