Linear Regression Channel plots the dynamic support and resistance levels with a set of trendline slopes. These levels are plotted automatically so that its users don’t have to bother with everyday artwork hassles at the trading chart. Intraday Forex traders along with the scalpers are widely applying this amazing tool to their daily Forex trading charts for trading perfections.
This indicator works at any timeframe chart and can be applied to trade all kind of Forex currency pairs available at MT4 terminal. Its simplicity of use and easy chart reading offers extra advantages to newbie traders.
Linear Regression Channel Overview
After the installation of the indicator at your Forex MT4 platform, your chart will appear as the following image:
This indicator plots a set of 7 trendline slopes to create a trendline channel as well as the dynamic support and resistance levels altogether. Price gets rejected from upper channels and heading to downwards is considered as the selling opportunity targeting the lowest regression channel to be hit. On the other hand, the price is supported by the lower channels and moving upwards is simply reflected as the buying opportunity. In such case, the target will be the top regression channel level.
Linear Regression Channel: Buy Parameters
- Price is supported by the lower Regression Channel
- A bullish bar forms which validate the current bullish move
- Buy triggers once above conditions are met
- Set stop loss below the current support level
- Take profit/exit long once price hits the top Regression Channel
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Linear Regression Channel: Sell Parameters
- Price is resisted by the upper Regression Channel
- A bearish bar forms which validate the current bearish move
- Sell triggers once the above conditions are met
- Set stop loss above the current resistance level
- Take profit/exit short once price hits the lowest Regression Channel