In this article we are going to show a modified technical indicator for Metatrader 4 that plots an ILRS (Integral of Linear Regression Slope) moving average on any price chart of this trading platform. It is a free indicator that was designed by ForexDominion experts and can be downloaded at no cost.
The ILRS is a little known and different moving average from more traditional moving averages like the SMA or EMA and is based on different principles. It is designed to follow changes in market movements quite closely, that is, to have fewer lags with respect to price action, although like all moving averages it can also have lags and false signals.
What is the ILRS indicator?
The ILRS (Integral of Linear Regression Slope) indicator is a moving average that is calculated as the slope of a linear regression line that is integrated as it fits in a time-moving window of N periods through the price data. The derivative of the ILRS is the slope of linear regression. Therefore, the ILRS is not the same as an SMA (simple moving average) of N periods, which is actually the midpoint of the linear regression line as it moves through the data.
Sounds complicated right?
It’s really not that complex, especially if you know some of the math involved in linear regression which isn’t that complicated. Therefore, to make it easier for Forex traders to use and apply this interesting technical tool, we have developed this modified indicator for MT4 which is currently the most popular trading platform among retail Forex and CFD traders.
ILRS Moving Average for MT4
As we already indicated, this indicator is designed to plot an ILRS moving average of N periods on any price chart of this platform, as shown in the following image:
The above image shows a price chart of the GBP/USD pair with an ILRS moving average where we can see how the indicator line follows the price action quite closely.
Due to its calculation formula, the indicator calculates the linear regression line for each value in the price data as a function of time. In this sense, it is similar to the LSMA (Least Square Moving Average) moving average which is also based on the principles of linear regression, although the latter follows price action more closely, as shown in the image below:
The ILRS features a smoother line than the LSMA which follows price action more closely. Therefore, although the ILRS detects price changes so well, it is probably better suited to determine the general trend of the market.
You can download a modified indicator for Metatrader 4 that plots an LSMA moving average on any chart at: LSMA Indicator For MT4
Indicator configuration parameters
This is a fairly simple indicator where the trader can modify two parameters: the ILRS calculation period and the type of price used in the calculation (Close, Open, High, Low, Median, Typical and Weighted). The following image shows the indicator configuration window:
The only two configuration parameters of this indicator are the following:
- ILRS moving average period: In this parameter we indicate the number of periods used in the calculation of the ILRS moving average.
- Price applied in the calculation: Through this parameter we indicate the price type used in the calculation of the indicator. We can use the closing price, opening price, maximum price, minimum price, median price, weighted price and typical price.
Note: As we already pointed out, this indicator is free to download. But if you want to use this and other types of moving averages, including the classic moving averages like the SMA, EMA or other little-known moving averages like adaptive moving averages, from a single indicator, you can get more information at: Magic MA Moving Averages MT4
Download and installation of the ILRS indicator for MT4
You can download this indicator at no cost at the following link:
You can access a complete list of free custom indicators for MT4 and MT5 in the following article: List of Custom Indicators For Metatrader
Are you interested in developing a custom technical indicator or Expert Advisor for MT4 or MT5?
If you are interested in building a custom indicator or Expert Advisor (automated trading system) based on your own strategy or trading idea but don’t have the time or knowledge to do it yourself, we can do the job for you in no time and at the best prices. You can contact us through: rcanessa@gmail.com
