Linear Regression Oil Technical Analysis & Linear Regression Oil Trading Signals

Another name for a regression line is a line of the best fit/best fit line. This oil indicator plots the oil trend of the crude crude oil trading price over a specified duration of time. The market oil trend is determined by calculating a Linear Regression Oil Trend Line using the "least squares fit" method. This method helps to minimize the distance between the crude crude oil price data points and the line of best fit.

Unlike the straight Regression Trend-Line indicator, the indicator plots the end values of multiple Linear Regression trend-lines. Any single point along the Linear Regression will be equal to the end value of a Regression Trend-line, but the resulting oil trend line looks like the Moving Average.

But unlike the Moving Average, this indicator does not show as much delay since it's fitting a line onto data points rather than averaging them.

The Linear Regression is a prediction of the tomorrow's crude crude oil trading price drawn today, one day before. When the crude oil trading prices are steadily higher or lower than the forecast crude crude oil trading price, then a Oil trader can expect them to quickly return to more realistic fore-casted levels.

In other terms, this indicator shows where the chart crude oil prices "should" be trading based on a statistical basis and any disproportionate deviation from the regression line is likely to be short-lived.

Crude Oil Technical Analysis and Generating Oil Trading Signals

This oil indicator allows for crude crude oil trading price selection, adjusting number of periods and smoothing of crude crude oil price data before applying the calculation and the selection of smoothing type.

This oil indicator looks like a moving average but it has a bi-color representation.

• Bullish Signal (Blue color) - A rising line (greater than its previous value 1 previous bar before) is displayed in the up oil trend blue color, while
• Bearish Signal (Red color) - a declining line (lower than its previous value 1 previous bar before) is displayed in the down oil trend red color.

Technical Analysis in Crude Oil Trading