Welcome to Saxo Bank Hong Kong

Please select your language

New chart annotation tool
- Linear Regression Lines

From 10th November 2017, Linear Regression Lines will be available in SaxoTraderGO. Linear Regression Lines is a new statistical chart annotation tool which tries to predict future values from past values and is a straight line that best fits the prices between a starting price point and an ending price point.

A "best fit" means that a line is constructed where there is the least amount of space between the price points and the actual Linear Regression Line.

Traders use the Linear Regression Lines to try to determine a trend direction regarded as the fair value. If the price for an instrument is below a Linear Regression Line for some time, it could be an indication of a trend change and this could be considered a buy signal. Similarly, if the price is above the Linear Regression Line it could be considered a sell signal. 

It can be difficult to identify how far below or above the line a price should move from the Linear Regression Line before it is a good buy or sell signal. For more objective indicators, extra lines can be added parallel to the Linear Regression Channel - we have added extra lines by default at ±1 and ±2 Standard Deviations. You can remove these outer lines in the configuration settings for the annotation.

The following EURUSD chart shows a Linear Regression Channel with the lines extended (shown as dashed lines).

 

We have indicated a few areas on the chart where it might be a good signal to buy or sell i.e. when the price crosses the outer 2 Standard Deviations line from the Linear Regression.

In the configuration settings for the Linear Regression Line, you can delete or add lines, extend them as well as the usual configuration such as colors, line type and calculation details. 

Saxo Capital Markets HK Limited
Rooms 2001-02, 20/F York House
The Landmark
15 Queen's Road Central
Hong Kong

Hong Kong

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract) and Type 3 Regulated Activity (Leveraged foreign exchange trading) licenses (CE No. AVD061). Registered address: Rooms 2001-02, 20/F York House, The Landmark, 15 Queen's Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.