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Here's a nice basic question. What is the difference between a trend channel and a regression channel? Can I use them interchangeably. If not why would one be preferred? Thanks in advance for educating me.
Can you help answer these questions from other members on NexusFi?
The only similarity is that they have an upper and lower line.
A regression channel is calculated using a linear regression of a sample of prices and an upper and lower bounds beyond the linear regression line.
A trend channel is usually two lines: a line connecting sets of highs, and another line connecting sets of lows. These are usually manually drawn by the trader, but there are indicators that will draw them based on certain rules. There are no specific "right way" to draw or compute trend lines. It is subjective.
