LSMAs

This indicator calculates and plots two Least Squares Moving Averages (LSMA) based on different lengths and a Smoothed Moving Average (SMMA) of the longer LSMA.

Inputs

lengthA : Period length for the first, longer LSMA.
lengthB : Period length for the second, shorter LSMA.
signAl : Signal period used in SMMA smoothing.

Calculations

LSMA-A and LSMA-B : Calculates the linear regression (least squares) of source over lengthA and lengthB respectively, with no offset. These represent two LSMAs, one slow and one fast.

SMMA : This is a smoothed moving average of the longer LSMA (LSMA-A).

Purpose

This indicator helps traders identify trend directions and momentum by using two least squares regression lines of different lengths to capture short- and long-term trends in price. The SMMA smoothing of the longer LSMA may be used as a signal or confirmation line to reduce noise and produce smoother signals.

It generates buy and sell signals based on the intersection of the LSMA-A and SMMA. If the LSMA-A crosses the SMMA upwards, a BUY signal is generated; if it crosses the SMMA downwards, a SELL signal is generated.

The LSMA-B, which is short-term, can be used for wave analysis. When a peak forms, a high is observed on the chart, and when a valley forms, a low is observed. This allows us to determine whether the wave is rising or falling.

Summary

Two LSMAs are calculated: one slow (lengthA), one fast (lengthB).
A smoothed moving average (SMMA) of the slow LSMA is computed using the signal length (signAl).

All three curves are overlaid on the price chart for visual trend and momentum analysis.