test sma

The Least Squares Moving Average (LSMA) is a technical indicator that uses linear regression to plot a line of best fit over a set of price data, helping traders identify trends with minimal lag. [1, 2]

How LSMA Works

Linear Regression: Instead of averaging past prices like a Simple Moving Average (SMA), LSMA calculates a regression line that minimizes the squared errors between the data points and the line over a rolling window. [1, 2]

Endpoint Plotting: For each time period, the indicator plots the end value of that calculated regression line, creating a continuous moving average curve. [1, 2]

Reduced Lag: Because it projects the trend rather than just taking a mean, it reacts much faster to price changes than traditional moving averages. [1, 2]