DollarLink can now draw regression lines based on a user-selected portion of a price chart. The chart can be either a bar chart or a tick-by-tick line chart. The selection is done graphically using either a mouse or cursor keys.
A regression line is a statistical concept. It is a straight line between a series of data points such that the sum of deviations of all data points from the line is the minimum. In technical analysis, the regression line typically represents a trend line that incorporates the effect of all price data. Basically, it is a way of drawing a trendline that is more accurate than doing it by eyeballing the underlying price data.
To use this feature, press DDR (Data, Draw, Regression) while in graphics mode.
DollarLink will ask you if you want to compute and draw a regression line based on either A)ll data in the chart, or S)pecify a number of bars/ticks, or P)ortion of data in the chart. For this new feature, choose P. You will then select two spots on the chart (using either the cursor keys or the mouse) and all the data between the two spots will be used to compute the regression line. The regression line is then drawn over the entire chart.
This feature is useful because you have control over what portion of the chart should be used in the construction of a regression line. If you draw a regression trendline based on what you may consider a particularly important portion of a chart, and if the price action eventually penetrates this trendline, this could be a significant decision-making event.
After the line is drawn, DollarLink considers it just like any other straight line that you might draw. It is remembered, it can be made into a sticky line, and it can have alerts set on it.
DollarLink Software will be closed on Labor Day, Monday, September 1, 1997.
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