Linear Regression Curve

The Linear Regression Curve (or Linear Regression Indicator) is a trend-following indicator that incorporates a forward-looking factor not found in other trend indicators.

The calculation of the Linear Regression Curve is derived from that of the Linear Regression Line.
Given a chosen time period, for each trading session, the terminal value of the linear regression line is calculated over the period preceding the session.

Example

Interpretation

The Linear Regression Curve offers certain advantages over the Moving Average.
It is more sensitive to price changes and therefore has less lag in detecting trend reversals. It does not produce more false signals as a result.
It follows the price trend more closely rather than simply averaging the past.

The Linear Regression Curve is better suited than the Moving Average for studying short and very short-term trends. However, for medium and long-term trends, it has no particular advantage.