# Regression Channel

The Regression Channel is an analytical drawing tool used to precisely define a price trend and its boundaries with regard to the support and resistance levels. To create the Regression Channel two parallel equidistant lines are drawn above and below a linear regression regression channel that is based on a user specified price (High, Low, Open, Close). The bottom line is the support level, and the top line - the resistance level. All these channels are based on the linear regression regression channel.

Prices may extend outside the channel for a short period of time. But if prices stay outside the Regression Channel for a long period of time, a reversal trend may occur.

The distance of the channel lines from the median regression line is based on either:

- The highest point among the peaks and lowest point among the troughs between the points upon which the median regression line is drawn.
- A user specified number of standard deviations above/below the median regression line.
- The maximal upward or downward oscillation.
- A user specified number of standard errors above/below the median regression line.

Markets tend to have a "balancing point" that is a point towards which prices tend to move. The Regression analysis allows you to determine this "balancing point". On the other hand, the Standard Error analysis helps determine the "extreme points".

In MultiCharts there are 4 types of regression channels:

- Segment High-Low.
- Standard Deviation.
- Raff Regression.
- Standard Error.

## Contents

## Inserting Regression Channel

- Select one of three ways to insert the Regression Channel:
- The cursor will change to the
**Regression channel**. - In the Chart Area click where the Regression Channel is to begin.
- Then keeping the left mouse button pressed move the pointer left or right to position the Regression Channel.
- Release the button.

## Moving Regression Channel

To move a Regression Channel without changing its period length:

- Point the cursor at the Regression Channel that is to be moved.
- The cursor
**Pointer**will change into**Hand**. - Then keeping the left mouse button pressed drag the drawing tool to the desired position.
- Release the button.

## Reshaping Regression Channel

To reshape a Regression Channel (change its length):

- Point the cursor at the Regression Channel that is to be reshaped.
- The cursor
**Pointer**will change into**Hand**. - Left-click the Regression Channel and 2 small squares will appear at both ends of the regression line.
- Drag one of these squares till the drawing tool becomes of the desired shape. Keep in mind that the Regression Channel will dynamically calculate the regression.
- Release the button.

## Formatting Regression Channel

In MultiCharts one can change the settings of the Regression Channel. All the changes are performed in the **Format Regression Channel** window.

Each instance of a Regression channel has its own **Format** window. The number (if there are 2 or more Regression channels in the same Chart Window) are shown in the titlebar of each **Format Regression Channel** window.

One can change the settings of a Regression Channel: the color, style and weight of the Regression, Upper Channel and Lower Channel lines. It is possible to extend the Regression Channel to the left or/and to the right. One can choose to show or not the labels and select their font, its style and size, and the character set. It is possible to apply the strikeout or underline effects. If shown the labels can be displayed to the left or to the right of the Upper Channel and Lower Channel lines. One can also select one of 4 calculation types available to compute the Regression Channel and the price types to compute the regression line. It is also possible to change the time coordinates of the Regression Channel.

### Setting Style

- Access the
**Format Regression Channel**window.- To access the
**Format Regression Channel**window:- Drag the cursor to the Regression channel that is to be formatted.
- The cursor
**Pointer**will change into**Hand**, then double-click.

- Or

- Drag the cursor to the Regression channel that is to be formatted.
- The cursor
**Pointer**will change into**Hand**, then right-click. - Select
**Format 'Regression Channel'…**from the shortcut menu.

- Or

- In the
**Format Objects**window select the**Drawings**tab. - Select the Regression channel that is to be formatted and press the
**Format…**button.

- To access the
- Select the
**Data**tab. - To display or hide any elements of the Regression channel check or uncheck the
**Regression**,**Upper Channel**or**Lower Channel**check boxes. - In the
**Color**column, using the drop-down lists, select the desired colors of the preset 40 colors for the Regression, Upper Channel or Lower Channel lines or click the**Others…**button to select the custom colors. - In the
**Style**column, using the drop-down lists, select the desired styles for the Regression, Upper Channel or Lower Channel lines. - In the
**Weight**column, using the drop-down lists, select the desired weights for the Regression, Upper Channel or Lower Channel lines. - Check the
**Use as Default**check box to use these settings as the default settings when creating other Regression Channels. - Click
**OK**.

### Extending Regression Channel to Left or Right

- Access the
**Format Regression Channel**window.- To access the
**Format Regression Channel**window:- Drag the cursor to the Regression channel that is to be formatted.
- The cursor
**Pointer**will change into**Hand**, then double-click.

- Or

- Drag the cursor to the Regression channel that is to be formatted.
- The cursor
**Pointer**will change into**Hand**, then right-click. - Select
**Format 'Regression Channel'…**from the shortcut menu.

- Or

- In the
**Format Objects**window select the**Drawings**tab. - Select the Regression channel that is to be formatted and press the
**Format…**button. 2. Select the**Data**tab.

- To access the
- In the
**Extend**section check the**Left**or/and**Right**check boxes to extend the Regression channel to the left or/and right. - Check the
**Use as Default**check box to use these settings as the default settings when creating other Regression Channels. - Click
**OK**.

### Setting Labels

- Access the
**Format Regression Channel**window.- To access the
**Format Regression Channel**window:- Drag the cursor to the Regression channel that is to be formatted.
- The cursor
**Pointer**will change into**Hand**, then double-click.

- Or

- Drag the cursor to the Regression channel that is to be formatted.
- The cursor
**Pointer**will change into**Hand**, then right-click. - Select
**Format 'Regression Channel'…**from the shortcut menu.

- Or

- In the
**Format Objects**window select the**Drawings**tab. - Select the Regression channel that is to be formatted and press the
**Format…**button. 2. Select the**Labels**tab.

- To access the
- Check or uncheck the
**Show Labels**check box to display or hide the labels. - Enter the desired font in the
**Font**field or select it from the**Font**list. - Enter the desired font style in the
**Font Style**field or select it from the**Font Style**list. - Enter the desired font size in the
**Size**field or select it from the**Size**list. - In the
**Effects**group check or uncheck the**Strikeout**or/and**Underline**check boxes to display the labels struck out or/and underlined. - From the
**Character Set**drop-down list select the desired character set. - From the
**Align**drop-down list select the desired type of the labels' alignment. - Check the
**Use as Default**check box to use these settings as the default settings when creating other Regression Channels. - Click
**OK**.

### Setting Calculation Type

- Access the
**Format Regression Channel**window.- To access the
**Format Regression Channel**window:- Drag the cursor to the Regression channel that is to be formatted.
- The cursor
**Pointer**will change into**Hand**, then double-click.

- Or

- Drag the cursor to the Regression channel that is to be formatted.
- The cursor
**Pointer**will change into**Hand**, then right-click. - Select
**Format 'Regression Channel'…**from the shortcut menu.

- Or

- In the
**Format Objects**window select the**Drawings**tab. - Select the Regression channel that is to be formatted and press the
**Format…**button.

- To access the
- Select the
**Properties**tab. - In the
**Regression Line**section, using the**Based on**drop-down list, select the price on which the regression line is based. - In the
**Calculation**section select the desired calculation type. There are 4 calculation types:**Segment High/Low****Raff Regression****Standard Deviation**

- Note. Using this type one should specify the number of standard deviations to plot the Upper and Lower Channel lines.

**Standard Error**

- Note. Using this type one should specify the number of standard errors to plot the Upper and Lower Channel lines.

- Check the
**Use as Default**check box to use these settings as the default settings when creating other Regression Channels. - Click
**OK**.

### Setting Coordinates Precisely

- Access the
**Format Regression Channel**window.- To access the
**Format Regression Channel**window:- Drag the cursor to the Regression channel that is to be formatted.
- The cursor
**Pointer**will change into**Hand**, then double-click.

- Or

- Drag the cursor to the Regression channel that is to be formatted.
- The cursor
**Pointer**will change into**Hand**, then right-click. - Select
**Format 'Regression Channel'…**from the shortcut menu.

- Or

- In the
**Format Objects**window select the**Drawings**tab. - Select the Regression channel that is to be formatted and press the
**Format…**button.

- To access the
- Select the
**Properties**tab. - In the
**Coordinates**section enter the desired time coordinates in the**Start Date**and**End Date**fields or use the drop-down calendar. - Check the
**Use as Default**check box to use these settings as the default settings when creating other Regression Channels. - Click
**OK**.