Polynomial Regression Indicator

Polynomial Regression Indicator

Polynomial Regression Indicator

$20

The PRC (Polynomial Regression Channel) is a regression indicator that draws a line to fit best on the chart. It applies a polynomial function to linear regression function (three-line technical indicator used for analyzing upper and lower band limits of the trend) through recent period’s data. That’s why it is also called the Linear Regression Channel. As the Polynomial Regression Channel is a regression band, it adjusts itself for volatility.

How to use the Polynomial Regression Channel?

As we mentioned, the Polynomial Regression Channel uses a degree of polynomial to display data points. This creates boundaries around the price. Here the support and resistance come into play from the bears and the bulls.

The bullish trend appears when the price is increasing, and the slope of the regression line is positive. This is known as a bullish regression channel.

The bearish trend appears when there is a decrease in price, and the slope of the regression line is negative. This is known as the bearish regression channel.

With the Polynomial Regression Channel, you have the upper band, the lower band, and the neutral band. The neutral band is present in the middle.