Linear Regression Channel (Std Error) & Trend

This indicator plots a Linear Regression Channel that dynamically adapts to price action using a rolling lookback period. It is designed to assist traders in identifying the dominant trend direction and statistical volatility extremes.

Methodology & Calculations

Center Line (Basis): Calculated using the ta.linreg function. It represents the "best-fit" straight line through the price data over the specified length, serving as a mean-reversion anchor.

Outer Bands: Constructed using Standard Deviation (ta.stdev) multiples added to and subtracted from the center line. These bands expand and contract based on market volatility.

Trend Logic: The color of the channel is determined by the slope of the Linear Regression line. A positive slope turns the channel Green (Uptrend), while a negative slope turns it Red (Downtrend).

Key Features

Trend Visualization: The background color provides an instant visual cue of the market regime.

Visual Signals (UP/DN): Small triangular labels appear when the slope polarity flips (e.g., from negative to positive), marking a potential trend change.

Dynamic Support/Resistance: The Upper and Lower bands act as dynamic levels where price is statistically overextended, often leading to mean reversion or consolidation.

Alerts Included

Trend Change (UP): Triggered when the LinReg slope turns positive.

Trend Change (DOWN): Triggered when the LinReg slope turns negative.

Price > Lower Band: Potential mean reversion (bounce) signal.

Price < Upper Band: Potential mean reversion (pullback) signal.

Settings

Length: Adjusts the lookback period for the regression calculation (Default: 100).

Multiplier: Adjusts the width of the bands based on Standard Deviation (Default: 2.0).

Disclaimer: This tool is for educational purposes and technical analysis only. Past performance does not guarantee future results. Always manage your risk.