Best Forex Indicator Extended Regression StopAndReverse: Regression Channels
System: Metatrader 4
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The Extended Regression StopAndReverse best indicator calculates a dynamic regression channel and is a mini-trading system.
What is best forex indicator Extend Regression
When launched, the Extended Regression StopAndReverse best forex indicator automatically determines the timeframe, calculates two types of regression on the current timeframe, and calculates the root-mean-square price deviation for this range. First of all, the straight golden line is important for us – the regression line of the first degree, showing the direction and state of the current true trend on the selected timeframe. It is clear that the greater the angle with the horizontal, the stronger the trend. Thus, we are able to draw some conclusions about the state of the currency pair based on the current price position relative to the regression line.
For example, in the most general case, if the ray is ascending and the price is below the ray, this indicates a recent end of a minor correction, and we should expect the price to naturally move to the area above the regression ray as part of the continuation of the trend.
How to use best forex indicator Extend Regression
At some distance from the golden line, there are parallel lines of support and resistance along the trend. They are respectively below and above the trend line. These are valid linear threshold levels, since they are built on the value of the standard deviation on the calculated range with the corresponding Fibonacci coefficient.
Using the value of the standard deviation and the corresponding Fibonacci coefficients, the best indicator forex uses a special algorithm to calculate the values of adaptive levels “stop” and “stop/reverse” for the current price. These levels can be interpreted as instantaneous maximum deviation values on the time section of the last bar. These values are shown as multicolored dots above and/or below the price according to the currency pair condition. Dots of blue shades are drawn below the price, the lighter ones are the stop, the darker ones are the stop/reverse. Red dots are drawn above the price and also show stop and reversal levels. For any price value on any bar, the best indicators mt4 always displays only two levels of instantaneous values, and not all four. This helps to draw appropriate conclusions about the state of the trend.
An important detail – when one or two stop levels are truly broken, when the closing price of the bar goes beyond the corresponding level, the indicator displays this event by reversing instantaneous values – say, if these were resistance levels before the break, then after the break, the indicator draws instant support levels instead . Thus, if you see a reversal, this is at least a short-term trend change to a minor correction. According to the given regression coefficient, the corresponding non-linear channel is calculated and displayed, which is necessary for predicting the near future, and in addition, it performs the same role as the linear channel, that is, displaying the actual levels of support and resistance, but dynamically and non-linearly changing in time. By default, the parabolic regression coefficient is used, i.e. 2.
Input parameters of the best forex indicator
Interpreting the best forex indicator readings is relatively simple:
Let’s say the non-linear regression channel bends and crosses the golden uptrend line from top to bottom. This is a signal of exhaustion – a correction or even a change in trend should be expected. If it crosses it from the bottom up, this is a signal of an increase in the strength of the trend. With a downtrend, everything is vice versa, respectively. You also need to switch to the higher and lower timeframes and see the situation there.
Crossing the support and resistance lines by the price:
If the price jumped out of the resistance in an uptrend, you should expect it to return to the channel, but it is not at all necessary to close your orders.
If the price jumps out of support during an uptrend, a strong correction should be expected if it breaks both stop/reversal levels.
For a more accurate understanding of the situation, it is also necessary to take into account the state of the channel relative to the golden trend line, and the readings on neighboring timeframes. Accordingly, with a downtrend, the opposite is true. All channels are dynamically recalculated and redrawn with each new bar depending on the current market situation. Despite the rather complex mathematics, the Extended Regression StopAndReverse best trading indicator does not load the processor at all and does not require special computer resources.
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