Regression Channel with variable polynomial degree, Indicator & EA:
Forum on trading, automated trading systems and testing trading strategies
Indicators: Linear Regression Channel
newdigital, 2013.09.27 09:39
Similar to the 200-day Moving Average, large institutions often look at long
term Linear Regression Channels. A Linear Regression Channel consists of three
The multi-year chart of the S&P 500 exchange traded fund (SPY) shows
prices in a steady uptrend and maintaining in a tight one standard deviation
Linear Regression Channel:
The upper and lower channel lines contain between themselves either 68% of
all prices (if 1 standard deviation is used) or 95% of all prices (if 2 standard
deviations are used). When prices break outside of the channels, either:
When price falls below the lower channel line, a buy signal is usually
An opportunity for selling occurs when prices break above the upper channel
Other confirmation signs like prices closing back inside the
regression channel could be used to initiate buy or sell
orders. Also, other technical indicators should be used to confirm.
When price closes outside of the Linear Regression Channel for long periods
of time, this is often interpreted as an early signal that the past price trend
may be breaking and a significant reversal might be near.
Linear Regression Channels are quite useful technical analysis charting
tools. In addition to identifying trends and trend direction, the use of
standard deviation gives traders ideas as to when prices are becoming overbought
or oversold relative to the long term trend.
I run this in MT4's Strategy Tester and the EA still seems not to do anything at all. I looked at the code and it looks solid... but no trades happen at all.
Well it does open one or two, but they're completely out of step with the i-Regr indicator.
I think this indicator is quite pretty and nice. But I hope you can add to this indicator a vertical line on the last candlestick.