Linear Regression Forecast

Linear Regression Forecast

The Linear Regression Forecast (LRF) uses the ordinary least squares method to derive a linear function which plots a straight line through prices so as to minimize the distances between the prices and the resulting trendline. The last point of the trendline is the forecasted value. The LRF is a moving series which plots the forecasted value of the derived trend line each period, thereby following the market like a moving average.