Trading Software

Linear Regression Acceleration

The Linear Regression Acceleration indicator calculates the change in the regression line's normalized slope on the current bar from its normalized slope from the previous bar. The normalized acceleration value is then plotted for each bar loaded in the chart.

Interpretation

The Linear Regression Acceleration indicator calculates the change in normalized slope of the regression line from one bar to the next for each bar loaded loaded in the chart. (See the Linear Regression Slope indicator for additional details about regression slope)

If the normalized acceleration is 0.20, then the regression line's nomalized slope is rising at a rate of 0.20 per bar. Similarly, a normalized slope of -0.55 would indicate that the regression line's normalized slope is declining at the rate of 0.55 per bar. For example, if the current bar's normlized slope value is 0.45 and the previous bar's normalized slope value is 0.37, then the normalized acceleration of the current bar would be calculated as 0.45 - 0.37 = 0.08.

PLEASE NOTE: It's important to understand that a positive acceleration value does not equate to a positive slope value; it simply means the slope is increasing. A negative acceleration value does not equate to a negative slope value; it simply means the slope is decreasing.

Implementation

The Regression Periods, Regression Price, Pre-Smoothing Price Periods and Pre-Smoothing MA Type inputs have been parameterized to allow the user full customization of this indicator. The resulting regression slope indicator is displayed as a bi-color histogram that oscillates above and below 0. A reference line is set at the 0 level. A rising slope (greater than its previous value 1 bar ago) is displayed in the UpSlope color, while a declining slope (lower than its previous value 1 bar ago) is displayed in the DownSlope color.

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