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General Information 1. Stochastic Oscillator 2. On Balance Volume (OBV) 3. Japanese Candlesticks 4. Relative Strength Index (RSI) 5. Bollinger 6. Standard Deviation 7. Linear Regression Channel 8. Parabolic SAR 9. Moving Average Convergence/Divergence (MACD) 10. Williams %R 11. Momentum 12. ZigZag 13. Moving Average 14. High Low Open Close (HLOC) 15.ADX 16.Fibonacci 17.Draw Tool

Linear Regression Line

Definition: This instrument enables to establish the tendency of historical values for a given time period. Le principle is to search for the line (Trend) that the sum of distances of the different closing prices is at its minimum during the given period.

When to use the Linear Regression Line

- Establish a trend for a certain security. - Identification of support and resistance levels

Analysis Tools for the Linear Regression Line

On a purely statistical point of view, if we continue to draw a fictious line (blue), it should give us the next potential price in function with the N last values. The two orange lines, perfectly parallel, and equidistant, to the blue line, are traced using the point between the blue line and the closing price the farthest from it on both sides of the blue line. This enables you to often identify the support and resistance levels of a security. For Example, when you purchase a security the line seems to have a up-going tendency, here it is possible to identify the support. Furthermore, as soon as the security price crosses the inferior line, it is a sell signal and a sign that a price inversion will take place.

For example: In the case of Schweiter, at the beginning of 1998, by keeping the two red points (15 April / 1800 CHF and 21st May / 2060 CHF) we can verify that the price does not pass under this support line, implying that the security will continue to rise in the long term and no correction is foreseen.

Tips & Tricks   ^

The choice of the number of days to use for this indicator corresponds globally to the vision that you have for your investments (from short term to long term).

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