Tutorial Linear Regression Line + Signal Indicator for MT4: A Smart Way to Spot Trend Shifts

[Troiz-Trader]

In the world of technical analysis, linear regression is a powerful tool for identifying the direction and strength of a trend. The Linear Regression Line + Signal indicator for MetaTrader 4 (MT4) takes this concept a step further by not only plotting the regression line but also generating signals based on the slope of the line—helping traders make smarter, more timely decisions.


What Is a Linear Regression Line?


A linear regression line is a statistical tool that models the relationship between time and price. It draws a straight line through the price data in a way that minimizes the distance between the line and the actual prices. This line represents the trend of the market over a given period.


Unlike moving averages, which smooth out price data, the regression line gives a more mathematically precise view of the trend.


How the Indicator Works?


The Linear Regression Line + Signal indicator consists of two main components:

1. Linear Regression Line: Plotted on the chart to show the current trend direction.
2. Signal Generator: Based on the slope of the regression line.

Slope-Based Signal Logic

The indicator calculates the current slope of the regression line and compares it to a predefined slope threshold. A signal is generated when:

• Buy Signal: The slope crosses above the threshold, indicating increasing bullish momentum.
• Sell Signal: The slope crosses below the threshold, signaling bearish momentum.

// Logika sinyal: Crossing slope
for(int i = MathMax(start, 2); i < rates_total - 1; i++)
{
double slope_current = LRLBuffer - LRLBuffer[i - 1];
double slope_prev = LRLBuffer[i - 1] - LRLBuffer[i - 2];

// Abaikan crossing yang terlalu kecil
if(MathAbs(slope_current) < slopeThresholdUsed)
continue;
// Crossing negatif -> positif => Buy
if(slope_current > 0.0 && slope_prev <= 0.0)
{
if(lastSignal != 1)
{
BuyArrowBuffer = Low - ArrowOffset * Point;
lastSignal_price = BuyArrowBuffer;
lastSignal = 1;
}
}

// Crossing positif -> negatif => Sell
else if(slope_current < 0.0 && slope_prev >= 0.0)
{
if(lastSignal != -1)
{
SellArrowBuffer = High + ArrowOffset * Point;
lastSignal_price = SellArrowBuffer;
lastSignal = -1;
}
}
}

This method helps filter out noise and only triggers signals when the trend strength is significant enough to warrant attention.


Why Use This Indicator?

• Trend Confirmation: It helps confirm whether a trend is strong or weakening.
• Early Signals: Slope-based logic can provide early entry or exit points.
• Customizable: Traders can adjust the slope threshold to match their risk tolerance and trading style.
• Visual Clarity: The regression line offers a clean, easy-to-read representation of market direction.

How to Use It in Your Strategy?

1. Trend Following: Use buy signals to enter long trades during uptrends and sell signals during downtrends.
2. Filter Entries: Combine with other indicators (e.g., Bollinger Bands, RSI, or MACD) to confirm signals.
3. Exit Strategy: Use slope reversals as exit points to lock in profits.

 

[eggzactly]

thanks for the indicator but not plotting nothing on chart