Linear Regression Fan
Oct 11, 2021

The Linear Regression Fan Indicator is a powerful tool for traders, providing a unique approach to analyzing market trends with precision. By utilizing a linear regression fit to prices, this indicator displays equidistant lines forming a fan, which can aid in identifying key support and resistance levels. These lines originate from the first point of the linear regression and extend to the most recent point, adjusted by the root-mean-square deviation (RMSD) multiplied by a specified factor.
Optimizing Linear Regression Fan Settings
Understanding and optimizing the indicator settings can enhance its effectiveness as part of your trading strategy. The primary settings include:
- Length: Defines the lookback period for the linear regression. Adjusting the length can help you target specific pivot points, whether high or low.
- Mult: This multiplier for the RMSD allows traders to alter the width of the fan, thus capturing broader or narrower trends as needed.
- Lines Per Side: Specifies the number of lines on each side of the fan, which assists in detailed analysis of support and resistance.
- Src: Selects the input source for the indicator, which could be various price points or data sets.
How to Trade with the Linear Regression Fan
The Linear Regression Fan Indicator aids traders in identifying critical areas of support and resistance, essential for predicting potential reversals. By adjusting the length setting, traders can ensure that the linear regression starts from significant pivot highs or lows, enhancing the accuracy of the analysis.
Technical analysts often employ this indicator in conjunction with the measure rule of broadening wedges. When the price breaks one of the fan's extremities, traders can use this as a signal to set precise take-profit and stop-loss levels.
Interested readers can further explore this strategy by researching the measure rule associated with broadening wedges.
Frequently Asked Questions
How can I access the Linear Regression Fan Indicator?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
What is the main advantage of using the Linear Regression Fan Indicator?
The indicator's main advantage lies in its ability to highlight significant support and resistance levels through a visual representation of data trends, allowing traders to anticipate market movements more accurately.
How does the multiplier (Mult) affect the indicator's output?
The multiplier adjusts the width of the fan, influencing how trends are observed and interpreted, thereby providing flexibility in analysis.
Trading is risky and many will lose money in connection with trading activities. All content on this site is not intended to, and should not be, construed as financial advice. Decisions to buy, sell, hold or trade in securities, commodities and other markets involve risk and are best made based on the advice of qualified financial professionals. Past performance does not guarantee future results.
Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, including, but not limited to, lack of liquidity. Simulated trading programs in general are designed with the benefit of hindsight, and are based on historical information. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
As a provider of technical analysis tools for charting platforms, we do not have access to the personal trading accounts or brokerage statements of our customers. As a result, we have no reason to believe our customers perform better or worse than traders as a whole based on any content or tool we provide.
Charts used on this site are by TradingView in which the majority of our tools are built on. TradingView® is a registered trademark of TradingView, Inc. www.TradingView.com. TradingView® has no affiliation with the owner, developer, or provider of the Services described herein.
This does not represent our full Disclaimer. Please read our full disclaimer.
© 2025 LuxAlgo Global, LLC.