R-squared of the trend fit
A 0 to 1 number for how closely the last N closes follow a straight line.
Statistics and riskBest on 3M, 6M, 1YAlso called R², coefficient of determination
What it shows
R-squared is the share of the variation in price that the fitted line explains. 1 means all closes lie exactly on the line. 0 means the line explains none of it.
It says how straight the trend has been, not how fast it is rising.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Fit the regression line to the last 50 closes.
- Compute the sum of squared errors from the line.
- R² = 1 − (squared errors ÷ total variation).
- Plot under the price.
Starting values: N 50. These are proposed and will be tuned on real price data before launch.
How to read it
- The panel shows R-squared.
- Near 1: price follows a straight line.
- Near 0: no straight trend.
Status labels you may see
| Label | What it means |
|---|---|
| Smooth trend | R² above 0.8. |
| Moderate | 0.4 to 0.8. |
| Weak | Below 0.4. |
What cancels it
Nothing cancels it.
What traders check next
- Slope.
- Direction.
- Window.
Limits
- Straight lines are a simplification.
- Sensitive to window.
- A flat series can have a low R² even if stable.
Try it in forecastviz
- Open any ticker and choose Statistics and risk → R-squared of the trend fit in the left menu.
- Switch between 3M, 6M, 1Y to see how the picture changes.
- Compare with Linear regression slope and Average directional index on the same chart.
Questions
High R² means a rising price?
No. It could be a smooth fall.
Why use it?
To tell clean trends from noisy ones.
Related trends
Further reading
- Kaufman, Trading Systems and Methods
- Achelis, Technical Analysis from A to Z
- Mandelbrot, The (Mis)Behavior of Markets
- Sharpe, Mutual Fund Performance
Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.