Zero-Cross Signals from a Difference of Linear Regression Curves

Summary

This indicator compares two linear regression estimates of closing price, using a slower 14-period curve and a faster 2-period curve. It subtracts the faster estimate from the slower one and plots the difference as an oscillator around a zero line, with color changing according to whether the value is positive or negative.

The stated trading rule is to buy when the oscillator crosses below zero and sell when it crosses above zero. The document provides the indicator logic but no backtest, market context, performance evidence, or risk controls. Its signals therefore serve as a basic technical example; the text does not establish that the counterintuitive buy-below, sell-above rule is profitable or suitable across instruments and timeframes.

Key ideas

• The oscillator is the difference between 14-period and 2-period linear regression estimates of closing price.
• A zero line provides the reference for interpreting the oscillator's sign.
• The described rule buys on a downward zero-line crossing and sells on an upward crossing.
• The document supplies no empirical evaluation or risk-management guidance.

Tags

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