R-Squared (or R²)

The R-Squared is an indicator based on linear regression that calculates the correlation rate between prices and the linear regression line.
This indicator varies between 0 and 1. The closer its value is to 1, the stronger the correlation between the prices and the linear regression line.
This indicator helps confirm the trend indicated by the linear regression line.

When for a given linear regression period, the R-squared is below a critical threshold, (see the table below) it means there is no correlation between prices and the linear regression line.

Linear Regression Period	R-Squared Critical Threshold (95% Confidence)
5	0.77
10	0.40
14	0.27
20	0.20
25	0.16
30	0.13
50	0.08
60	0.06
120	0.03

Example

Interpretation

When the linear regression slope crosses above the 0 level (uptrend) and the R-squared exceeds its critical threshold, it represents a potential buy signal.