Linear Regression Acceleration
This lesson will cover the following
- Explanation and calculation
- How to interpret this indicator
- Trading signals, generated by the indicator
This indicator reflects the change in the normalized slope of the regression line on the present bar from the normalized slope on the prior bar. The normalized acceleration value is then used for every bar loaded in the chart.
In case the normalized acceleration value is 0.25, this means that the regression lines normalized slope is increasing at a rate of 0.25 per bar. In case the normalized acceleration value is -0.60, this means that the regression lines normalized slope is decreasing at a rate of -0.60 per bar.
A positive acceleration value is not equal to a positive slope value – it only suggests that the slope is increasing. A negative acceleration value is not equal to a negative slope value – it only suggests that the slope is decreasing.
If the normalized slope value of the present bar is 0.50 and the normalized slope value of the prior bar is 0.41, then the normalized acceleration of the present bar can be estimated (0.50 – 0.41 = 0.09).