Time Series Forecast

The Time Series Forecast is used to predict price movements. It consists of linear regression measurements using the “Least Squares Method.”

This indicator “Fits” the trend line to the data in the chart by minimizing the distance between data points and the linear regression trend line.

It gives off the same signals as a moving average. When the stock price crosses above the time series forecast line it is said to be a bullish signal. When it crosses below the line it is said to be a bearish signal.

1. It has much less delay when adjusting to price changes because it “fits” price rather then takes the average. That means you can get out of a falling stock earlier so that you do not have to wait for it to pull back.

2. It estimates the next period’s price that is based on the trend over a specific period of time. This helps you use the past trends of the stock to predict what might happen in the future.

The disadvantage of the Time Series Forecast is that it might get you out to early, since it does not give you as much leeway as the moving average would. So it may or may not be the best for you depending on your trading strategy.

A trader using this indicator would consider it a buy signal when the stock breaks through the line on the upside or when it bounces up off of the line. They would consider it a sell signal when it breaks through the line to the downs or bounces down off of the line.

Just like all oscillators it works best when combined with other oscillators or other indicators.