Volume Weighted Linear Regression Channel

This indicator plots a dynamic channel around a Linear Regression trendline. It provides a framework for identifying the prevailing trend and assessing price extremes based on volatility.

Key Features:

Linear Regression Baseline: The channel's centerline is a (Volume-Weighted) Linear Regression line. This line represents the 'best fit' for the recent price action, serving as a responsive baseline for the trend.

Volatility Decomposition: The indicator's primary feature is its ability to decompose volatility, controlled by the 'Estimate Bar Statistics' option.

Standard Mode (Estimate Bar Statistics = OFF): Calculates a standard linear regression channel. The bands represent the standard deviation of the residuals (the error) between the Source price and the regression line.

Decomposition Mode (Estimate Bar Statistics = ON): The indicator uses a statistical model ('Estimator') to calculate within-bar volatility. (Assumption: In this mode, the Source input is ignored, and an estimated mean for each bar is used for the regression). This mode displays two sets of bands:

Inner Bands: Show only the contribution of the 'residual' (trend noise) volatility, calculated proportionally.

Outer Bands: Show the total volatility (the sum of residual and within-bar components).

Volume Weighting: An option (Volume weighted) allows for volume to be incorporated into the calculation of both the linear regression and the volatility decomposition, giving more influence to high-participation bars.

Trend Projection: The calculated channel is plotted as a projection, which can be extended forward (Extend Forward) and backward (Extend Backward) in time to provide a visual guide for potential support and resistance.

Integrated Alerts: Includes a full set of built-in alerts for the Source price crossing over or under the calculated upper band, lower band, and the central regression line.

DISCLAIMER

For Informational/Educational Use Only: This indicator is provided for informational and educational purposes only. It does not constitute financial, investment, or trading advice, nor is it a recommendation to buy or sell any asset.

Use at Your Own Risk: All trading decisions you make based on the information or signals generated by this indicator are made solely at your own risk.

No Guarantee of Performance: Past performance is not an indicator of future results. The author makes no guarantee regarding the accuracy of the signals or future profitability.

No Liability: The author shall not be held liable for any financial losses or damages incurred directly or indirectly from the use of this indicator.

Signals Are Not Recommendations: The alerts and visual signals (e.g., crossovers) generated by this tool are not direct recommendations to buy or sell. They are technical observations for your own analysis and consideration.