AWR Optimized LR (Multiple)

Attached you will find the indicator that calculates linear regression lines according to several configurable periods.
There are a total of eight configurable periods.
Each time, the indicator will calculate for each specified range the best linear regression line & channel (2 standard regressions) for that period and then plot it on the graph.
It will currently be configured by default between 0 and 5000 UT, which provides both a short-term and a very long-term view.
You can set a specific color for each linear regression channels.

As a reminder, the linear regression line is based on the least squares method, meaning: the more the price deviates from its regression line, the more statistically likely it is to return to its regression line. From two standard deviations or minus two standard deviations), it is generally statistically proven that we will trend towards the regression line over time.

Application of Regression Lines in Trading

Regression lines are widely used in trading and financial analysis to understand market trends and make informed predictions. Here are some key applications:

1. Trend Identification – Traders use regression lines to visualize the general direction of a stock or asset price, helping to confirm an upward or downward trend.

2. Price Predictions – Linear regression models assist in estimating future price movements based on historical data, allowing traders to anticipate changes.

3. Risk Assessment – By analyzing the slope and variation of a regression line, traders can gauge market volatility and potential risks.

4. Support and Resistance Levels – Regression channels help traders identify support and resistance zones, providing insight into optimal entry and exit points in a trend.

5. You can also use the short period linear regression channels vs the long period linear regression channels to identify important pivot points.