What it does
A Linear Regression Channel fits a least-squares straight line through closing prices over a chosen window, then draws parallel boundaries above and below it at a set number of standard deviations (commonly 2) or at the maximum price deviation. The center line is the statistical best-fit path of the trend, and the channel frames how far price typically strays from it. The whole channel is recalculated as new bars arrive.
Typedraws on the price chart
How to add it
Click Indicators (ƒx) in the header.
Search “Linear Regression Channel” and click the result.
Hover its legend row and click the gear to open settings.
How traders use it
- The slope of the middle line gives an objective read of trend direction and steepness over the window.
- In an established trend, touches of the lower channel line are pullback buy zones and touches of the upper line are profit-taking or short-fade zones, with the midline as the mean-reversion target.
- A decisive close outside the channel signals either trend acceleration or a regime change; treat it as a cue to reassess rather than automatically fade.
- Match the regression length to your holding period (for example 100 bars for swing context) and check that the fit visually tracks price before trusting the boundaries.
Inputs
| Input | Type | Default | Range / Options |
|---|---|---|---|
| Length | number | 100 | 1–5000 |
| Source | source | close | Close / Open / High / Low / HL2 / HLC3 / OHLC4 |
| Upper Deviation | boolean | On | — |
| Upper Multiplier | number | 2 | 0.01–50 |
| Lower Deviation | boolean | On | — |
| Lower Multiplier | number | 2 | 0.01–50 |
| Show Pearson's R | boolean | On | — |
| Extend Lines Left | boolean | Off | — |
| Extend Lines Right | boolean | On | — |
Tips
- The legend eye toggles it off without losing your settings — handy for before/after comparisons.
- Its price-scale label can be switched off per-indicator at the bottom of the Style tab if the axis gets crowded.
- Drag the indicator to its own pane from the legend ⋯ menu if it crowds the price chart.
Watch out for
- The entire channel repaints as each new bar shifts the fit, so historical touch signals look cleaner than they were in real time.
- It assumes a linear trend; across a reversal or curved move the fitted line and its boundaries become misleading.