The linear regression line is the only line that minimizes the average distance between the line itself and the points of the price curve.

The regression line is therefore a segment that includes N price bars.

Let's consider an inclined segment of the curve that goes from a point L( 0 ) to a point L( n ) passing from intermediate points L( 1 ) ... L( n - 1 ), let's also imagine the point L that moves from period to period along the length L0Ln .

Let's suppose that the inclined segment is the hypotenuse of a rectangle triangle and let's call AB one of the two triangle sides.

The regression line generated from the last point L( 0 ) of the Regression Segment can be obtained with the function already known in technical analysis: LinReg( C, 7 )

and the inclination of the Regression Segment is:

LinRegSlope( C, 7 )

The Linear Regression segment can be considered as the hypotenuse of a rectangle triangle whose triangle sides are:

AB = LinRegSlope( C, N ) * ( N - 1 ) and from n = N - 1

For the Pythagorean theorem:

LOLn = SQRT( (AB)2 + (N – 1)2 ) by substituting we have:

L0Ln = SQRT( [ LinRegSlope( C, N ) * ( N - 1 ) ]2 + (N – 1)2 )

Where:

SQRT = indicates the square root

Prices moving above the Linear Regression Line are seen as positive or could begin a bullish move, while prices moving below the Linear Regression Line are seen as negative or could be beginning a bearish move.