Home > Technical analysis > Indicators and oscillators > Linear Regression Indicator (LRI)

# Linear Regression Indicator (LRI)

The basis of the **Linear Regression Indicator** is a price trend docked into a certain period. The method of linear regress calculation is the least squares. The least square lets drawing a trend line in the way that the root-mean-square divergence (axis Y) of the trend points from the n price chart points is set to minimum in the certain period.

A trend line drawn with the linear regress always finishes with the **LRI indicator** point. Though LRI indicator resembles moving average, it has some pluses. Unlike moving average, LRI has a lower axis X latency and therefore is more reactive to price movement.

Generally, LRI predicts the price for future periods according to the present price and taking into consideration past price trends. The calculation of the LRI indicator goes in the following way: draw a linear regression line through the defined period values to show the current figures. A linear regression line always comes as close as possible to the defined values and corresponds a straight line.

It is impossible to set the beginning of a data series LRI while the defined period is not filled with the data.

It is similar to the Time Series Moving Average and a zero offset Time Series Forecast.