Can Forex Trading To learn, particularly on technical indicators, we need an indicator, where the function of indicators is to determine a trend in Forex Trading, one of which is Linear Regression can help you in understanding the trend with an image as a curve that follows the development of a price movement. Where the concept is almost the same as when when we use the Moving Average (MA).

Linear Regression is a statistical data that can predict the future prices of past data, typically used where the current price movement is experiencing an increase or decrease very significantly. Linear Regression in the history of mathematics was first developed by Gauss which experts in mathematics in 1809. Then Gilbert Raff use these principles to trading shares for the first time.

The concept used in calculating a movement of an inflation in which prices of basic needs, it can be applied in measuring the price trend based on the graph. Gilbert Raff said that he used the Regression Channel to calculate accurately the price movements of stocks, bonds, mutual funds and commodities.

Where the formula or the formula of Linear Regression is as follows;

x = The current time period / period of time when this
n = The total number of time periods / number of periods of time

In a simple calculation of the Linear Regression, Raff change in the form of relationship with the price that is:

Linear Regression = Smooth Moving Average Price = (PRICE, Z)
Price = Price today
Z = Moving Average period 1

Functions of the Linear Regression
Linear regression is a technical indicator to measure a trend based on statistical methods. The resulting parabolic shape similar to the Moving Average where the methods used are also similar.

Look at the example image above, the chart of AUD / USD 1H time frame. Where was added also an indicator of Linear Regresion. Looks really similar to the MA. We can take a new position when seen through the Linear Regresion prices.

The method used in linear regression is as follows:

The movement of the indicator shows the trend of rising (bullish) or down (bearish).
If the price penetrates it will form a new trend.
If a price trend up or down, the angle of the linear regression will also show an up or down movement of the base. At the time the price has to rise or fall we can expect higher yields more of these indicators. Linear regression is a model of relationship between two variables with linear equations. For example, the equation of weight and height of a man.

Thus the function is similar to the Moving Average, but the calculations by using statistical methods. Any points that described the linear regression indicator will leave a trail which is described as a whole in the form of curves. This indicator is useful for:

Predicting future prices based on current price movements.
Determine price trends. It's easy to apply where the current price of Linear Regression penetrate from below and above there will be a bullish pattern (trend up).
As a determinant Support & Ressistence. The points that I mentioned as a New Trend in the previous chart can be described as the last is Suppot point (lower limit of the price movement) and also Ressisten (upper limit of the price movement). In Forex Trading we can measure the correlation between price (Y) and time (X).
The advantages and disadvantages of these indicators as follows:

Pros:
This indicator is very easy to use in measuring a price trend. With the help of a MA line 1 then we will be able to conclude that if the Linear Regression line through the price it will form a new trend.

Disadvantages:
The nature of this indicator is Lagging or too late: if this indicator is used alone without any help from other indicators, then we do not know when prices will stop rising or fall. We recommend that you add indicators such as RSI or Stochastic oscillator to anticipate this.

Hopefully the above explanation can help you in forex trading. Good luck in reaching Profit.