Linear Regression Acceleration Commodities Technical Analysis and Trading Signals
Linear Regression Acceleration calculates the change in the regression line's gradient on the current commodities trading price bar from its gradient from the previous commodities trading price bar. The value used to calculate the linear regression is referred to as the normalized acceleration value which is drawn for each commodities trading price bar formed on the commodities trading price chart.
Linear Regression Acceleration
If normalized acceleration is 0.30, then the regression line normalized slope will be rising at rate of 0.30 per commodities trading price bar.
Similarly, a normalized slope of -0.40 would indicate that regression line normalized slope is declining at rate of -0.40 per commodities trading price bar.
For example, if the current commodities trading price bar normalized slope value is 0.40 and the previous commodities trading price bar normalized slope value is 0.20, then the normalized acceleration of the current commodities price bar would be calculated as 0.40 - 0.20 = 0.20.
Note: It's important to realize that a positive acceleration value does not equate to a positive slope value, it simply means gradient of slope is increasing. A negative acceleration value does not equate to a negative slope value, it simply means gradient of slope is decreasing.
Implementation of Linear Acceleration Regression Technical Indicator
The Linear Regression Acceleration indicator allows for the following; commodities trading price selection, regression periods, smoothing of raw commodities price before applying the regression & selection of the smoothing type.
The resulting regression slope is displayed as a bi-colored histogram which oscillates above and below 0.
The reference line is set at the 0 level mark.
- A rising slope: (greater than its previous value of One bar before) is displayed in up slope color.
- A declining slope: (lower than its previous value of One bar before) is displayed using the down slope color.
