Barbara Star’s Linear Regression Reversal Indicator can be easily implemented in the NeuroShell Trader by combining a few of the NeuroShell Trader’s over 800 indicators. To implement the indicator, select ‘New Indicator …’ from the ‘Insert’ menu and use the Indicator Wizard to create the following indicator:
| LINEAR REGRESSION REVERSAL INDICATOR: IfThenElseIfThen( A>B(LinTimeRegSlope(Close,5),0),1,A<B(LinTimeRegSlope(Close,5),0),-1,0) |
To create the Linear Regression Reversal Indicator trading system described in the article, select ‘New Trading Strategy …’ from the ‘Insert’ menu and enter the following long and short entry conditions in the appropriate locations of the Trading Strategy Wizard.
| Generate a buy long MARKET order if ALL of the following are true: |
| CrossAbove ( Lag ( LinTimeRegSlope(Close,5), 1), 0) A>B ( Close, Lag ( High, 1 ) ) |
| Generate a long trailing stop order at the following price: |
| TrailPrice% ( Trading Strategy,5) |
| Generate a sell long MARKET order if ONE of the following conditions is true: |
| CrossBelow ( Lag ( LinTimeRegSlope(Close,5), 1), 0) A<B ( Close, Lag ( Low, 1 ) ) |
| Generate a short trailing stop order at the following price: |
| TrailPrice% ( Trading Strategy, 5 ) |
If you have the NeuroShell Trader Professional, you can also choose whether or not the system parameters should be optimized. After backtesting the trading strategy, use the ‘Detailed Analysis …’ button to view the backtest and trade-by-trade statistics for the Linear Regression Reversal Indicator system.
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