Standard Error Bands are plotted at standard error levels above and below a linear regression plot. The standard error measures how closely prices congregate around a linear regression line. The closer prices are to the linear regression line, the higher the r-squared value and the stronger the trend.
Jon Anderson developed standard error bands
that are a type of envelope. Standard error bands are similar to Bollinger
Bands in appearance but are calculated and interpreted quite differently.
Click
here to discover how MetaStock plots Standard Error Bands based on
the security's prices or indicator.
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