Linear Regression Channels with Break-Triggered Segments

Summary

This indicator fits a linear regression to closing prices from the most recent segmentation point through the current bar. It estimates residual standard deviation and uses a configurable multiplier to place upper and lower bands around the regression line. When a close moves beyond a band, the current channel is stored as a completed segment, and a new segment begins. The chart displays the center line, boundary bands, and shaded areas. Colors indicate whether the channel slope is rising, falling, or relatively neutral, based on its rate of change per hour.

The document provides implementation logic but no market examples, backtest, or performance evidence. It also calculates deviation using a shortened period and includes additional statistics that do not appear to affect the displayed signals. Channel breaks define segment boundaries; they are not evaluated as profitable entries. The indicator is therefore a visualization and segmentation method, not a tested trading system. Results may depend on timeframe, input multiplier, and implementation details.

Key ideas

• The indicator fits a linear regression to closes since the last segmentation point.
• Upper and lower bands are offset from the regression line using residual standard deviation and a shared multiplier.
• A close outside either band stores the current segment and resets the starting point.
• Channel color represents the estimated slope direction and speed per hour.
• The document supplies code logic but no evidence that the channel predicts profitable trades.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.