Category: Average Sales and Support: 022 - 4091 8900

Study Name -
LEAST SQUARE MOVING AVERAGE (LSMA)

 
 

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

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

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LSMA graph line reflecting lean regression of data

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Formula

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

 
 
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