NSR - Dynamic Linear Regression Channel

Overview
The NSR - Dynamic Linear Regression Channel is a powerful overlay indicator that plots a dynamic regression-based channel around price action. Unlike static channels, this tool continuously recalculates the linear regression trendline from a user-defined starting point and builds upper and lower boundaries using a combination of standard deviation and maximum price deviations (highs/lows).
It visually separates "Premium" (overvalued) and "Discount" (undervalued) zones relative to the regression trend — ideal for mean-reversion, breakout, or trend-following strategies.

Key Features

• Dynamic Regression LineCalculates slope, intercept, and average using full lookback from a reset point.
  
• Adaptive Channel WidthCombines standard deviation of residuals with max high/low deviations for robust boundaries.
  
• Auto-Reset on BreakoutChannel resets when price closes beyond upper/lower band twice in direction of trend.
  
• Visual ZonesBlue shaded = Premium (resistance zone)
  Red shaded = Discount (support zone)
  
• Real-Time UpdatesLive channel extends with each bar; historical channels preserved on reset.
  

How It Works

• Regression Calculation
  Uses all bars since last reset to compute the best-fit line:
  y = intercept + slope × bar_position
  
  
• Deviation BandsStatistical: Standard deviation of price from regression line
  Structural: Maximum distance from highs to line (upper) and lows to line (lower)
  Final band = Regression Line ± (Deviation Input × StdDev)
  
  
• Channel Reset Logic
  Resets when:
  Price closes above upper band twice in an uptrend (slope > 0)
  OR closes below lower band twice in a downtrend (slope < 0)
  Prevents overextension and adapts to new trends.
  
  
• Visual Output
  Active channel updates in real-time
  Completed channels saved as historical reference (up to 500 lines/boxes)
  

Input Parameters

Deviation (2.0) - Multiplier for standard deviation to set channel width
Premium Color - blue color for upper (resistance) zone
Discount Color - red color for lower (support) zone

Best Use Cases

Mean Reversion - Buy near lower band in uptrend, sell near upper band
Breakout Trading - Enter on confirmed close beyond band + volume
Trend Confirmation - Use slope direction + price position in channel
Stop Loss / Take Profit - Place stops beyond opposite band

Pro Tips

• Use on higher timeframes (4H, Daily) for cleaner regression fits
  
• Combine with volume or momentum to filter false breakouts
  
• Lower Deviation (e.g., 1.5) for tighter, more responsive channels
• Watch channel resets — they often mark significant trend shifts
  

Why Use DLRC?

"Most channels are static. This one evolves with the market."

The NSR-DLRC gives you a mathematically sound, visually intuitive way to see:

• Where price should be (regression)
  
• Where it has been (deviation extremes)
  
• When the trend is breaking structure

Perfect for traders who want regression-based precision without rigid assumptions.
Add to chart → Watch price dance within the evolving trend corridor.