Linear Regression Channel Indicator on TradingView - Free - [TFlab]

The Linear Regression Channel indicator is a technical analysis tool used to identify support levels and resistance levels, as well as analyze uptrends and downtrends.

This indicatorconsists of5 main components:

1. Middle Line: Represents the linear regression line, indicating the overall market trend;
2. First Support Line: Located below the middle line, acting as the initial support level;
3. Second Support Line: Positioned below the first, indicating a stronger support level;
4. First Resistance Line: The initial resistance level is located above the middle line;
5. Second Resistance Line: Above the first resistance line, representing a stronger resistance level in the market.

Indicator Specifications Table

The table below summarizes the features of this indicator:

Indicator in Uptrend

In a 4-hour price chart of an oil index, the Middle Line has a positive slope, and prices fluctuate between the middle and resistance lines.

Traders initiate buy trades after breaking the middle line and approaching the second support line.

Indicator in Downtrend

In a descending channel of the AUD/USD pair, the Middle Line has a negative slope, and prices oscillate between the resistance and support lines.

Approaching these second resistance lines could act as a reversal zone. Traders can entersell trades after observing Doji Candles and necessary confirmations.

Indicator Settings

The following image illustrates the indicator’s specifications:

• Time Frame: Setting the timeframe
• Data Window Period: Number of recent candles used for calculation
• Regression Type: Choosing the regression type for analysis
• Scaling Type: Selecting the type of scaling;
• Scaling Coefficient Level 1: Setting the first scaling level;
• Scaling Coefficient Level 2: Adjusting the second scaling level;
• Extend Channel: Extend the channel for future movement predictions.

Conclusion

The Linear Regression Channel is an efficient tool for predicting price behavior in financial markets.

This indicator significantly enhances price behavior analysis by clearly displaying trends and providing support and resistance levels.

It finds applications in various markets, including Forex, stocks, and cryptocurrencies, aiding traders in trend analysis, risk management, and identifying Key Price Levels.