R-Squared

Description

This indicator belongs to the linear regression series. R-Squared is the correlation coefficient that specifies the quality of the linear regression line.

It is the calculation that gives R-Squared its name – the value is the square of the correlation coefficient, which in mathematics is prefixed with the Greek letter Rho (P).

See Linear Regression, LinRegSlope, LinRegIntercept.

Interpretation

The value of the oscillator fluctuates between 0 and 1. By default, the upper boundary line is located at 0.75, and the lower border is at 0.2. If the prices are in a sideways movement, the data is scattered around the regression line. R-Squared will have a value of 0 in the aforementioned situation. In a strong trend phase, the prices will remain within a tight range for an extended period of time; if these are located close to the regression line then the R-Squared indicator will have a value of 1. Stanley Kroll and Tuchar Chande used the correlation coefficient as a trend filter in their book “The new technical trader”.

Further information

http://www.blastchart.com/Community/IndicatorGuide/Indicators/LinearRegressionRSquared.aspx

Usage

RSquared(int period)
RSquared(IDataSeries inSeries, int period)
RSquared(int period)[int barsAgo]
RSquared(IDataSeries inSeries, int period)[int barsAgo]

Return value

double

When using this method with an index (e.g. RSquared(8)[int barsAgo] ), the value of the indicator will be issued for the referenced bar.

Parameters

inSeries Input data series for the indicator

period Number of bars included in the calculations

Visualization

R-Squared

Example

//Output for the value of R-Squared
Print("The current value of R-Squared is: " + RSquared(8)[0]);