Note: This documentation applies to the Nuvexlens Advanced Charting System. Nuvexlens fully supports technical indicators and strategy backtesting to help you make smarter trading decisions.
Least Squares Moving Average
Definition
Least Squares Moving Average is a curve showing linear regression calculations. On each bar, the indicator displays a linear regression based on the prices for a period that is specified by the Length value in settings.
Calculations
Pine Script
//@version=5
indicator(title = "Least Squares Moving Average", shorttitle="LSMA", overlay=true, timeframe="", timeframe_gaps=true)
length = input(title="Length", defval=25)
offset = input(title="Offset", defval=0)
src = input(close, title="Source")
lsma = ta.linreg(src, length, offset)
plot(lsma)Summary
The Least Squares Moving Average can be used as a trend indicator and reversal indicator. It is used as an alternative to other traditional indicators like the moving average or exponential moving average. The Least Squares Moving Average has a different calculation than both of those moving averages. The indicator displays a linear regression based on the prices for a specific period of time. This period of time can be defined in the indicator settings.