Description

• Also known as Endpoint Moving Average, Time Series Moving Average and Time Series Forecast
• This indicator calculates least regression on previous periods and then applies the expression to current period. Thus it estimates what would have happened had the regression line continued
• It is more responsive to price change, so reversal in trends are spotted early

Interpretation

• It can be used with a another moving average to generate signals on crossovers
• The price line moving above the LSMA indicates an uptrend suitable for Buy trades
• The price line moving below the LSMA indicates an downtrend suitable for Sell trades

Default Parameters Used/Inputs

• Data line- Close line, High line, Open line, Low line or others
• Bars – number of bars for which LSMA has to be calculatedn

Returns/Output

LSMA graph line reflecting lean regression of data

Formula

b=n((∑ XY) - (∑ X)(∑ Y) /
n(∑ X2) - (∑ X)2
a=(∑ Y) - b(∑ X) / n
LSMA = a+bX