The “Past Regression Deviated MQ4” trading indicator – Linear regression attempts to model the relationship between two variables, given a collection of data values.
The technique tries to do so by finding a line of best fit between the two. With Forex linear regression trading, the two variables we are interested in are time and price.
Existing data values between the two are plentiful, of course.
By observing the data in a given period, …we theoretically gain insight into the future performance, given that we can find a satisfactory line of best fit. This is because the line of best fit is effectively what traders normally call the trend.