Linear regression curve is a trend following indicator.

Being a trend following indicator,Linear regression curve was created to enable traders know whether the market is in an uptrend or a downtrend. Just like other trend following indicator,Linear regression curve is also based on support and resistance.

Linear regression curve is derived based on linear regression line equation .The equation will produce a straight line when fitted with various prices over a given period.

Therefore,the values of linear regression curve which follows the linear equation rule is calculated as follows;

y= a +bx

where as

y is price

x is period

b is constant

Therefore, linear regression curve indicator can further be explained as follows using bullish and bearish crypto market;

1. Linear regression curve bullish cryptocurrency market

Since linear regression curve is a trend following indicator,it therefore follows that when the market is moving downwards, the linear regression curve will also be moving downwards .Based on support,when the price in the market falls below the lowest point of linear regression curve when the two are moving downwards, an upward reversal movement will take place. This will signal the cryptocurrency trader that a support point has been created over there thus signalling them to purchase a given amount of cryptocurrency with their USDT balance. The trader can either place a market buy order or a limit buy order. The market buy order will be processed immediately while the limit buy order will be processed when the market reaches a buy limit order price. This is indicated as from below;

The above represents the TRX market against USDT. Two points are being indicated. There is point A and point B. Point A is the linear regression curve while point B is the support point. Before point B, the price in the market and the linear regression curve were moving downwards. The price in the market then falls below the lowest low point at point B thus creating a support point over there. Because of this, an upward reversal movement started to take place thus signalling the cryptocurrency trader to purchase a given amount of TRX with their USDT balance. The trader can either place a market buy order which will be executed immediately or a limit buy order which will be executed when the market reaches their limit buy order price. When the order is being processed,the account of the trader will start increasing in value in terms of USDT.

2. Linear regression curve bearish cryptocurrency market

Since linear regression curve is a trend following indicator,it therefore follows that when the market is moving upwards, the linear regression curve will also be moving upwards .Based on resistance,when the price in the market rises above the highest high point of linear regression curve when the two are moving upwards, a downward reversal movement will take place. This will signal the cryptocurrency trader that a resistance point has been created over there thus signalling them to sell a given amount of cryptocurrency which they had previously purchased and is currently holding. The trader can either place a market sell order or a limit sell order. The market sell order will be processed immediately while the limit sell order will be processed when the market reaches a sell limit order price. This is indicated as from below;

The above represents the TRX market against USDT. Two points are being indicated. There is point A and point B. Point A is the linear regression curve while point B is the resistance point. Before point B, the price in the market and the linear regression curve were moving upward. The price in the market then rises above the highest high point at point B thus creating a resistance point over there. Because of this, a downward reversal movement started to take place thus signalling the cryptocurrency trader to sell a given amount of TRX which they had previously purchased and is currently holding to avoid declining the value of their trading account. The trader can either place a market sell order which will be executed immediately or a limit sell order which will be executed when the market reaches their limit sell order price. When the order is being processed,the account of the trader will have increased in value in terms of USDT.

cryptocurrency market is a highly volatile market. As a cryptocurrency trader,whenever you place a buy order,always make sure to apply risk management so that whenever your buy order goes against you, your account do not depreciate so much in value.

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