Linear Regression Channel Indicator

Linear Regression Channel Indicator

The Linear Regression Channel Indicator for MT5 is a useful tool that automatically place trendlines accurately.

One of the basic trading skills is drawing trend lines. This will help you identify trading opportunities when the price is moving in a channel. When you draw the lines correctly, you can easily identify areas where price could reverse. But you don’t have to do all the chore of drawing a channel. The Linear Regression Channel Indicator will do all the work for you. Just run the indicator and it will draw a channel for you on the chart.

You can use the indicator to trade any instrument. But this only works when the instruments move inside the channel.

How to trade with a signal
The linear regression channel has five lines. The upper lines act as resistance, while the lower lines act as support. The top lines are formed by connecting the swing high, and the bottom lines are connecting the swing low. The center line is the median between the straight lines.

Just open a buy order when the price touches the support line and open a short position when the price touches the resistance line.

Linear Regression Channel Trading Example

The Linear Regression Channel Indicator shows the trend of the EURUSD channel within the channel. Notice how the currency pair bounces after hitting the channel lines. Therefore, you need to wait for the currency pair to reach the support line, enter a long position and sell when the line reaches the resistance line. The price range within the channel is more than 200 points.

Conclusion
Linear regression channel are a great addition for channel traders. This will help you identify areas where the price is likely to reverse within a certain trend. You can use it as a standalone strategy or in combination with other indicators.