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Investor/RT Tour
( more on Technical
Indicators )
Linear Regression Acceleration
| The Formula
. . . |
. . .more
on Formulas |
Acceleration
= Change in Slope / Bar
= Slope - Slope.1
Normalized Acceleration
= Change in Normalized Slope / Bar
= (Slope * 100 / Price) - (Slope.1 * 100 /
Price.1)
See Also...
...Linear Regression
...Linear Regression
Forecast / Bands
...Linear Regression Slope
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| The
Presentation . . . |
. . . more
on Charts |
|

Above is a Daily Candlestick Chart of an Intel
Corporation (INTC). The Linear Regression Acceleration (LRA)
is drawn in histogram form in the lower chart pane. The LRA
oscillates about the zero line. |
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| The
Preferences . . . |
. . . more
on Preferences |
|

|
-
Price - Price
data to be used in computation.
-
MA Type
- Type of smoothing to be applied prior to regression.
-
MA Period - Smoothing
period to be used prior to regression.
-
Regression Period
- Number of bars to be used in computing the regression
line.
-
x 100 / Price
(Normalize)
- Option to normalize the resulting acceleration
value. More details on normalization can be found in the
description below.
-
Histogram Color - Color
of the resulting histogram in the chart. Up bars will be
drawn in the first (Up) color, down bars will be drawn in the
second (Dn) color.
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| The
Description . . . |
| First, the data, based on the price
selected, is smoothed using the moving average period and
type. If you prefer no smoothing, choose a period of 1
here. The resulting data is then used to form regression lines
ending at each bar, using the regression period specified. The
linear regression acceleration of each bars regression line is then recorded as the
change in slope of the regression line from the slope of the
regression line of the previous bar. For instance, using the
preferences specified above, the raw closing price would be used
(smoothing period of 1). Then, using that
resulting data, for each bar, we would us that bar and the previous
8 bars (9 total) to form a regression line. The LRA of that
bar is then recorded as the difference between that regression lines
slope and the slope of the regression line of the previous bar.. The same calculation is done for each bar and then
plotted in the chart, as a histogram or a line.
If the "x 100 / Price (Normalize)" options is checked,
then the resulting value will be the change in normalized slope per
bar. This normalizes the data for the sake of comparison among
instruments that trade in different price ranges. If you are
interested in using this study to compare acceleration between
instruments, it's important that this normalizing option be
used. The difference between the normalized acceleration and
the raw acceleration is similar to the difference between percent
change (normalized), and change(unnormalized). If you're
comparing two instruments, one that's trading at 200 and another
that's trading at 10, then it's not fair to compare the change in
price, although the normalized value of percent change does give us
a fair basis of comparison.
The normalized acceleration value essentially gives us the change
is the normalized slope of the regression (best fit) line, from bar
to bar. If the normalized acceleration is 0.10, then the
regression line normalized slope is rising at a rate of 0.10 per
bar. Similarly, a normalized acceleration of -0.25 would
indicator that the normalized slope of line that best fits the last
N bars of data is falling at the rate o 0.25 per bar. For
example, if the normalized slope of the last bar was 0.25 (meaning
the regression line ending on that bar rises at a rate of 0.25% per
bar on average), and the normalized slope of the current bar was
0.27, then the normalized acceleration of the current bar would 0.27
- 0.25 = 0.02. A positive acceleration value does not equate
to a positive slope, simply to an increasing slope. Similarly,
a negative acceleration equates to a decreasing slope.
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| Keyboard
Adjustment . . . |
The periods involved in the
LRA indicator
can be adjusted directly from they keyboard without opening up the
preference window. First, select the indicator, then use the
up and down arrow keys to adjust the regression period up or down by
1. To adjust the MA period, hold down the shift-key while
hitting the up and down arrows. For more information on technical
indicator adjustment, click here.
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| RTL
Token . . . LRA ( more
) |
The RTL Token for Linear
Regression Acceleration is LRA. If the normalize value is
required, then check the "x 100 / Price (Normalize)"
checkbox. This option is recommended for doing comparisons
among indicators that don't trade in the same range. See above
for more details. If the normalize checkbox is unchecked, then
the result will be the raw acceleration value (Slope - Slope.1) of
the regression lines. If it is checked, the result will be the
normalized acceleration, or change in normalized slope, of the
regression lines.
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| User
Strategies . . . |
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02/26/02 |
| If you have a strategy
involving this indicator that you'd like to share, please email support@linnsoft.com
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