Linear Regression Channel

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Linear Regression Channel

Also developed by Gilbert Raff, the Linear Regression Channel is similar to the Raff Regression Channel, creating a channel around a central Regression Line.

However, unlike the Raff Regression Channel where channel lines are positioned equidistant from the Regression Line, the Linear Regression Channel plots each parallel channel line individually by identifying the furthest data point on either side of the Regression Line. The parallel upper and lower channel lines are then plotted to pass through the furthest high and the furthest low respectively on either side of the regression line.

Position and Edit

Regression Line

Create the central regression line by selecting the date the regression line is to be calculated from using one left mouse click, then move the cursor to the date of the regression line's end point, and click a second time.

The price level at which the clicks occur does not matter. The software uses a mathematical formula to calculate a gradient using the values of the price data type for each trading interval between the selected dates. The default data type is Close.

For more information on the line's method of calculation and display, go to the Regression Line topic.

Channel Lines

Once the user has created the regression line, the software looks for the furthest data points on either side of the regression line and plots two parallel lines intersecting furthest high and the furthest low.


Properties and Format

There are a number of properties that can be adjusted by the user in the Linear Regression Channel Properties dialog box.

Double left mouse click on the lines to open the Properties dialog box, alternatively, single right mouse click to open the pop-up menu, see below, and select its first command - Properties.

The Properties dialog boxes of all Channel drawing tools share a number of features and controls. These common elements are described and explained in Common Settings for Regression Lines and Channels topic.

Pop-up Menu

The pop-up menu (single right mouse click) for Linear Regression Channel has the standard links: Properties, Cut, Copy, Delete, Lock and Help.

In addition to the standard links, it includes the Parallel Trendline command. Click this to create a parallel line.

Note - This function will create one parallel trendline, not a duplicate set of parallel Linear Regression lines.

The resulting line is not a Regression line and will not have regression line functionality, when you move or resize the new line it will adhere to standard trendline functionality.

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