The Simple Linear Regression forex MT4 indicator draws 3 lines on the chart that forms a trading channel.
- The upper trend line represents resistance.
- The median line represents the center line of the channel.
- The lower trend line represents support.
Trading linear regression is quite easy to understand:
When the channel is pointing down, you would be looking for sell trade opportunities.
When the channel is pointing up, you would be looking for buy trade opportunities.
The EUR/USD H1 chart below displays the Simple Regression forex indicator in action.
Basic Trading Signals
Here’s how to trade linear regression:
Buy Trade: Open buy order near the lower trend line when the channel is pointing up (bullish trend)
Sell Trade: Open sell order near the upper trend line when the channel is pointing down (bearish trend)
Exit Trade: For long trades, close near the upper resistance trend line. For short trades, close near the lower support trend line, or use your own preferred exit method
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern indicator
Customization options: Variable (LookbackPeriod, AppliedTimeframe, RegressionStyle, RegressionColor) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the SimpleRegression.mq4 indicator into the MQL4 indicators folder of the Metatrader 4 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL4 > Indicators (paste here)