Linear Regression Channel
a.k.a. Regression channel
A channel built around a statistical best-fit line through price, with bands a set distance above and below.
In plain English
A channel built around a statistical best-fit line through price, with bands a set distance above and below.
A linear regression channel draws the straight line that best fits a set of prices, then adds parallel lines, often two standard deviations away.
The middle line shows the average direction; the outer lines show how far price usually strays. Unlike a hand-drawn channel, two traders using the same settings get the same lines.
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