Binary Options Indicator Linear Regression a conditional asset price corridor. It is formed by two lines: verhnyaya- resistance line, nizhnyaya- support line. The width of the channel depends on the timeframe, which uses a trader living in the settings chart.
Indicator Technical Analysis Linear Regression very easy to use. I myself love him very much and actively use in their analysis of the market.
Signals Indicator Linear Regression:
- If the value of the asset is approaching, touching, or even breaks above the upper resistance line, prices are expected to rebound and further movement in the opposite direction. In this case it is necessary to open an option PUT.
- If the value of the asset is approaching, touching, or even hit the bottom line of support is expected to rebound prices and further movement in the opposite direction. In this case it is necessary to open an option CALL.
Using indicator Linear Regression It requires attention compliance with certain rules:
- If you are trading currency pairs, stay tuned economic calendar. Do not trade for half an hour and 30 minutes after the release of important economic indicators.
- When opening option CALL make sure that the general direction of the price channel also moved up. Conversely, when opening the option PUT, Price channel should have a downward trend.
Best of all, the linear regression indicator shows itself on higher timeframes from 15 or more minutes. Experienced pros and does recommend it to apply at least one hour time intervals.
On the 1-5, the minute linear corridor that will line up with the indicator lines will not be accurate. And the signals will in most cases be false.
This is a great technical tool for those newbies who do not know how to build support and resistance lines on their own.
But, despite its significant advantages, there are some disadvantages. He is able to redraw his values immediately after the formation of the next new candle. Such a phenomenon is more like a classic time lag, which I often observe in the same Moving Averages, which do not keep up with the trend change.
To minimize the number of false alarms, you must adhere to the following rules:
- choose a currency pair with minimal volatility;
- the number of profitable trades will be greater if the likelihood of a trading asset in a flat state is high.
To filter the false breakdowns of the Linear Regression borders, I recommend using additional indicators that can determine both the trend and the side flat.
Some experienced pros, in addition to the classic signals for a rebound from the upper and lower bounds, open orders in case of a breakdown of the center line. This means that there was a change of trend to the opposite.