Linear Regression Channels

#1

Do linear regression channels work in trading?

#2

Like anything else - have to define a system around it with defined entries and exits.

Linear regression is a fancy word for historical volatility deviation with usually 2 lines above market 2 lines below market and 1 line in the center saying the market will return to the “mean” regress… its no different than bollinger bands keltner etc… etc… etc…

Its a return to the middle of the “historical” calculated standard deviation - which is only based on x bars back - not based on a time of day (so its using the 9:30 to 10:30 session to define the 10:30 to 11:00 session - ie on a setting of 12 period 5 minute bars - not a good idea…

Your better off looking at the close to close setting on the range indicator - which is specific to time of day and day of week deviations for every period for any time of the day you want the setting to be. That will tell you what the normal actual regression is.