Home > Articles > Volume 9 (1991) > Chapter 9 (September 1991) > V. 9:9 (353-353): Letters To S&C by Technical Analysis, Inc.

V. 9:9 (353-353): Letters To S&C by Technical Analysis, Inc.

V. 9:9 (353-353): Letters To S&C by Technical Analysis, Inc.
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Letters To S&C by Technical Analysis, Inc.

LEAST SQUARE, MOST COOL

Editor,

"A regression-based oscillator" by Patrick E. Lafferty (STOCKS & COMMODITIES, September) was very good, and I would like to see many more articles by him. His trading method was logically developed and appears to be very promising.

As the basis of his approach depends upon a least-square trend, I was dumbfounded in applying this method because I did not understand the least-square equation:

P = 390.52 - t(0.77202) + t2 (0.0055339)

where P is the price of June gold in dollars per ounce and t is the time in days. I do not understand where these values in the equation come from, let alone what t (time from where?) exactly means.

I would appreciate it if you would explain this least-square equation in a little more detail. And please understand that I am not a mathematician. M.R. SOUSANIS




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