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Regression channels and envelopes

Intermediate·7 min read·Premium lesson

A linear regression channel draws the best-fit straight line through the last 100 closes, with bands two standard deviations above and below. A moving-average envelope puts bands a fixed percentage around the 20 SMA. Both answer one question: how stretched is price from its trend?

The full lesson covers trading the channel, fading envelope tags and when not to fade.

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