Linear Regression Moving Average with Nested Bands

Summary

The document describes an indicator that applies a moving average to a linear regression and surrounds it with two channel widths, similar in concept to Bollinger bands. It names a narrow channel for reversal signals and a wider channel for breakouts.

The narrow channel width is controlled by a relative-width parameter. The wider channel is measured outward from the narrow channel, so its setting adds to that inner width. The description gives no formula for the regression or averaging period, no trading rules for interpreting crossings, and no test results. It therefore outlines the indicator’s structure and adjustable channel relationship but does not establish its performance or explain how to use it in a complete strategy.

Key ideas

• The indicator places two channel bands around a moving average of a linear regression.
• The narrow channel width is adjusted with a relative-width parameter.
• The wider channel width is measured from the narrow channel, adding its setting to the inner width.
• The document does not provide trading rules, parameter defaults, or performance evidence.

Tags

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