Define: Linear Regression Channels

UK Accounting Glossary

Definition: Linear Regression Channels



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Full Definition of Linear Regression Channels


Linear Regression Channels represent a method for computing a mean line which forms the best fit to a given set of data points and two parallel lines above and below the mean line which provide resistance and support respectively.

Multiple regression channels are drawn because the high or low price may break the trend of the previous regression channel over the course of time. There are several types of Linear Regression Channels including Breakout Standard Regression Channel, Classic Standard Regression Channel and Raff Regression Channel.

Linear Regression Channels are started by first plotting the (middle) baseline channel using the first ‘n’ points in a chart. The baseline channel is extended until the price breaks out of the channel and then a new channel computation begins. The upper and lower lines are dependent upon the type of Linear Regression Channel to be drawn. e.g. Breakout Standard Regression Channel, Classic Standard Regression Channel and Raff Regression Channel.

Linear Regression Channels are a means for computing a line which forms the best fit to a given set of data points and two parallel lines above and below the mean line which provide resistance and support respectively. Multiple regression channels are drawn because the high or low price may break the trend of the previous regression channel over the course of time.

The Breakout Standard Regression Channel is drawn using lines a number of standard deviations above and below the (middle) linear regression line.


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Definition Sources


Definitions for Linear Regression Channels are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 23rd March 2020.