Linear Regression Curve Trading Strategy for NASDAQ

Figure: Trading the NASDAQ stock with LRC strategy

NASDAQ is a global electronic marketplace where the American Stocks are traded around the world with cutting-edge technology over the extremely fast network. The NASDAQ is also known as the National Association of Securities Dealers Automated Quotations. In today’s world, 3200 companies are listed on the NASDAQ whose share is actively traded in the market. Though the shares involve varieties of top qualities companies but mostly high-end tech companies are the major ingredient of this stock market.

Professional traders prefer to trade the NASDAQ stock in the longer time since the return over investment and clarity of the price movement can be precisely calculated by technical analysis. Most professional traders use linear regression indicator curve and important support and resistance level of the price to trade the stocks.  Let’s see how the professional trade the NASDAQ market:

Figure: Trading the NASDAQ stock with LRC strategy

Figure: Trading the NASDAQ stock with LRC strategy

Professional traders use the linear Regression Curve indicator to identify the prevailing trend of NASDAQ. Long term trader set the value of period LRC indicator to 100 which gives much more accurate and stable reading. If the price is trading below the LRC line, it is said to be a downtrend whereas price trading above the LRC line indicates uptrend.

In the above figure, the price breaks the 100 LRC line near a key resistance level. Professional long-term trader waits for the price to retrace back and forms a bearish candlestick confirmation pattern in the key resistance level. The short trade is executed by the trader with the bearish engulfing pattern formed at the key resistance level below the LRC curve. Tight stopples are placed just above the confirmation candlestick pattern while taking the trade. Usually, traders carry their trade until and unless the price hit a major support level with possible bullish reversal candlestick pattern.

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