Last updated: 8 October 2026. Every screenshot below was recorded on 8 October 2026 on an IQ Option Practice account registered in Brazil, on EUR/USD 5-minute candles; the Chart analysis picture in Step 1 was recorded on 5 October 2026. We placed no real-money trade. The settings come from the platform’s dialog and the calculation from the published source code of the platform’s built-in indicators (Quadcode’s script library). The tested box shows what three of the rules did on EUR/USD 5-minute candles recorded between 29 September and 5 October 2026; it says nothing about what will happen next.
The Linear Regression Forecast draws a line over the price chart. At each candle it fits a straight line, by least squares, through the last 14 closes and plots the value of that line at the latest candle. It looks like a moving average that reacts faster to a change of direction, and it is more exposed to whipsaws. There are three ways to use it: trade when the line changes direction, trade when the price crosses it, or use a 300-candle line for the trend and a 100-candle line for the entry. On 5-minute EUR/USD candles the line stayed a median of 1.7 pips from the close, and the three rules gave 196, 249 and 24 signals.
Quick answer
- What it plots: one line over the price chart, close to the candles.
- Formula: for each candle, the end point of the least-squares straight line through the last n closes (n = 14 by default).
- Settings on the platform: Period 14 and Source (close).
- Reading: a rising line is an uptrend and a falling line a downtrend; the usual rules trade the turns of the line, the crossings of the price with it, or a long line as a filter for a shorter one.
- Where: the Trend list of the Chart analysis panel; search for Linear Regression Forecast.
- Tested: the turn of the line gave 196 signals (5-minute trades won 46.6%, 15-minute trades 53.1%), the crossing of the price 249 (45.9% and 50.4%), the two-line example only 24 (54.2%). Break-even is 54.1% at an 85% payout, and a few days of one pair prove nothing.
How do you add the Linear Regression Forecast on IQ Option?
Set the chart
Choose the asset, the chart type and the candle size first: the indicator is calculated from the candles on the chart. The examples in this guide use 5-minute candles on EUR/USD. These steps use the web traderoom on a Practice balance, and the numbers in each screenshot match the numbers in the text. If you do not have an account yet, see how to register.
Step 1: Open Chart analysis
Click the indicators button (1), the wave icon in the chart toolbar at the bottom left of the chart. The Chart analysis panel opens with the tabs Indicators, Templates, Widgets and Scripts. Stay on Indicators.
Step 2: Find Linear Regression Forecast
Type “Linear Regression Forecast” in the Search for indicators box (1), or open the Trend list, and click Linear Regression Forecast (2).
Step 3: Check the settings
The dialog has the tabs Basic settings (1), Colors and display and Script. The Period (2) opens at 14, the number of closes the straight line is fitted to. The Source (3) opens at close, the price the line is fitted to.
Step 4: Check the colours and click Apply
Open the Colors and display tab (1). The tab has one row, Main line (2), with a colour box, salmon red by default, and a line-style box. Click Apply (3).
Step 5: Read the lines
The Linear Regression Forecast is drawn over the price chart as one thin salmon line (1); it has no panel of its own. It follows the candles closely and turns a little after the price does.
How is the Linear Regression Forecast calculated?
For every candle the Quadcode source takes the last n values of the source (the closes), fits the straight line that has the smallest sum of squared distances to them, and plots the value of that line at the latest candle. It is the same fitted line as in the Linear Regression Slope, which plots the steepness of that line; this indicator plots its end point. It is the end points of all the regression lines drawn on the successive candles, and it is compared with a moving average that responds faster to changes of direction and therefore shows less delay, but is more susceptible to whipsaws.
| Part | Default | What it does |
|---|---|---|
| Period | 14 | Number of closes the straight line is fitted to |
| Source | close | The price used |
How do you read the Linear Regression Forecast?
There are three ways to trade it, and it works best in a strong trend. Turns: open a long trade when the line begins to move up and a short trade when it begins to fall; the same turn is the signal to close the opposite trade. Crossings: enter at the crossings of the price with the line. Two lines: add a longer line as a filter. In the usual example, a 300-candle line shows the main trend, and a 100-candle line is the entry: when the 300 line goes up and the price crosses the 100 line upwards, take a long trade; when the 100 line turns down, close it. For a downtrend the mirror applies, with the forecast line moving above the price as the sign of a possible reversal.
What did it look like on 5-minute candles?
We replayed the library script on EUR/USD 5-minute candles recorded from the Practice traderoom: 1,093 candles from 29 September 2026 (01:55 UTC) to 2 October (20:55 UTC) and 241 from 4 October (21:00 UTC) to 5 October (17:00 UTC). The 14-candle line has a value from the 14th candle of each stretch; the 300-candle line needs the first stretch, from its 300th candle on.
- Distance from the close: the 14-candle line was a median of 1.7 pips from the close (2.4 on average), 5.5 pips or less on 90% of the candles, and 18.1 pips at most; an EMA of 14 candles was a median of 2.7 pips from the close and an SMA of 14 candles 3.2.
- Signals: the turns of the 14-candle line gave 196 signals, the crossings of the price 249, and the two-line example only 24.
Two stills of the platform, window A (its part from 08:09 to 10:08 is the Step 5 picture) and window B (not pictured), agree with the replay: read off the chart at 133 points of the two windows, the line differed from the replay of the script by less than 0.1 pip at the median. In window A, 29 September from 06:43 to 12:38 on the platform clock, the line rises from 1.1334 to its high of 1.1356 at 09:20, falls to a low of 1.1341 at 10:45, rises to 1.1344 at 11:40 and ends at 1.1331 at 12:35, always within a few pips of the candles. In window B, from 12:03 to 17:52, it makes a low of 1.1331 at 12:45, a high of 1.1334 at 13:10, a deep low of 1.1313 at 14:30 and a high of 1.1346 at 15:55, and ends at 1.1338. A point is drawn at the close of its candle: the value of the candle that opened at 09:15 sits at the 09:20 mark.
Three rules, tested
We wrote the three ways as exact rules on closed candles, with the option opened at the close of the signal candle. Turn: Higher on the candle where the 14-candle line rises after having fallen or stood still, Lower where it falls after having risen or stood still. Cross: Higher on the candle that closes above the line after a close at or below it, Lower below it. Two lines: with the 300-candle line rising, Higher on the candle that closes above the 100-candle line after a close at or below it; with the 300-candle line falling, Lower on the mirror. No expiry is given, so the box shows five minutes and fifteen minutes. The two-line rule needs 300 candles of history, so it could only be run on the first stretch.
Tested on IQ Option: three rules of the Linear Regression Forecast, EUR/USD 5-minute candles of 29 September to 5 October 2026
| Asset and candles | EUR/USD binary (regular, not OTC): 1,093 five-minute candles (2026-09-29 01:55 to 2026-10-02 20:55 UTC). The candles were recorded from IQ Option’s Practice traderoom. The replay places no orders; it only scores the rule on those closed candles, at an 85% payout. |
|---|---|
| Rule tested | Three ways on closed candles, the option opening at the close of the signal candle. Turn: Higher on the candle where the 14-candle line rises after having fallen or stood still, Lower where it falls after having risen or stood still. Cross: Higher on the candle that closes above the line after a close at or below it, Lower below it. Two lines: with the 300-candle line rising, Higher on the candle that closes above the 100-candle line after a close at or below it; with the 300-candle line falling, Lower on the mirror. No expiry is given, so the box shows 5 and 15 minutes on 5-minute candles. |
| Signals | Turn of the line, period 14, 5-minute, 1 candle: 196 signals (98 Higher, 98 Lower) Price crosses the line, period 14, 5-minute, 1 candle: 249 signals (125 Higher, 124 Lower) Two lines 300 and 100, 5-minute, 1 candle: 24 signals (10 Higher, 14 Lower) Turn of the line, 5-minute, 3 candles: 196 signals (98 Higher, 98 Lower) Price crosses the line, 5-minute, 3 candles: 248 signals (124 Higher, 124 Lower) Two lines 300 and 100, 5-minute, 3 candles: 24 signals (10 Higher, 14 Lower) |
| Outcomes | Turn of the line, period 14, 5-minute, 1 candle: 90 won, 103 lost, 3 tied; 46.6% of the 193 decided trades won; net −$0.14 per $1 staked at 85% (−$0.11 at 91%) Price crosses the line, period 14, 5-minute, 1 candle: 112 won, 132 lost, 5 tied; 45.9% of the 244 decided trades won; net −$0.15 per $1 staked at 85% (−$0.12 at 91%) Two lines 300 and 100, 5-minute, 1 candle: 13 won, 11 lost, 0 tied; 54.2% of the 24 decided trades won; net +$0.00 per $1 staked at 85% (+$0.04 at 91%) Turn of the line, 5-minute, 3 candles: 103 won, 91 lost, 2 tied; 53.1% of the 194 decided trades won; net −$0.02 per $1 staked at 85% (+$0.01 at 91%) Price crosses the line, 5-minute, 3 candles: 125 won, 123 lost, 0 tied; 50.4% of the 248 decided trades won; net −$0.07 per $1 staked at 85% (−$0.04 at 91%) Two lines 300 and 100, 5-minute, 3 candles: 13 won, 11 lost, 0 tied; 54.2% of the 24 decided trades won; net +$0.00 per $1 staked at 85% (+$0.04 at 91%) |
| Break-even | At an 85% payout a trade needs to win more than 54.1% of its decided trades to break even (1 ÷ 1.85); at 91%, more than 52.4% (1 ÷ 1.91). |
A replay is only a look back at candles recorded on the dates above: it placed no real orders, covers about four and a half days of one pair, and counts overlapping trades as if they were independent. A short test proves nothing about the future, and no profit and no win rate is promised here. IQ Option’s own blog on backtesting says that most strategies need dozens, and often hundreds, of trades before a result means anything.
The turn of the 14-candle line gave 196 signals, 98 Higher and 98 Lower: with a trade of one candle (5 minutes) 90 won and 103 lost (46.6%, with a 95% interval of 40% to 54%), and with three candles (15 minutes) 103 won and 91 lost (53.1%, interval 46% to 60%). The crossing of the price with the line gave 249 signals, and 112 won against 132 with a 5-minute trade (45.9%) and 125 against 123 with a 15-minute trade (50.4%). The two-line example gave only 24 signals, and 13 won and 11 lost at both expiries (54.2%, interval 35% to 72%). None of the six readings is clearly above the break-even rate of 54.1% at an 85% payout: the two-line example is the only one at it, with 24 signals, and the price crossing the line lost at a 5-minute expiry.
Pros and Cons of the Linear Regression Forecast
| Pros | Cons |
|---|---|
| Follows the price more closely than a moving average of the same length: a median of 1.7 pips from the close in our replay, against 2.7 for an EMA and 3.2 for an SMA of 14. | It whipsaws more: the turn rule gave 196 signals in about four and a half days of 5-minute EUR/USD candles. |
| The end point of a straight-line fit is easy to explain and to compute. | The two-line example gave only 24 signals in about four and a half days, too few to judge. |
| One setting, the period; a long and a short line can be combined. | It works best in a strong trend, which is not the case most of the time. |
Common mistakes
- Calling it a forecast of the price. It is the end of a line fitted to past closes; it forecasts nothing.
- Trading the crossings in a range. In our test the price crossing the 14-candle line won less than half of its 5-minute trades (45.9%).
- Forgetting the history needed. A 300-candle line needs 300 candles of chart.
- Confusing it with the Linear Regression Slope. The slope plots the steepness of the same line in its own panel.
Related guides
- Linear Regression Slope and ALMA and LSMA
- Moving average on IQ Option and identifying a trend
- Leading and lagging indicators and trade entry signals
- All indicator guides and all strategy guides
Frequently Asked Questions
Q: What is the Linear Regression Forecast?
A: The value, at the latest candle, of the straight line fitted by least squares to the last n closes. It is drawn over the price chart.
Q: What settings does the Linear Regression Forecast have on IQ Option?
A: Period 14 and Source set to close. The Colors and display tab has a colour and a line style for the line.
Q: How is it different from a moving average?
A: It reacts faster to a change of direction and shows less delay, and it is more exposed to whipsaws.
Q: How are two lines used?
A: A line of 300 candles for the trend and a line of 100 candles for the entry: a long when the 300 line rises and the price crosses the 100 line upwards, closed when the 100 line turns down. It gave 24 signals in our recording.
Q: Does the Linear Regression Forecast predict the price?
A: No. It is calculated from past closes and has no information about the next candle.
Q: Can I use it on binary options?
A: The platform draws it on any chart. Whether a rule works is something to test on the Practice balance with the expiry you plan to use.
