Least Squares Moving Average (LSMA) – FX Replay Guide

The Least Squares Moving Average (LSMA) is available in FX Replay as a powerful tool for identifying trend direction and spotting potential reversals. It uses linear regression to smooth out price data and project the line of best fit over a chosen period—ideal for reducing noise and confirming structure shifts.

How to Use LSMA in FX Replay

1. Trend Identification

• A rising LSMA indicates an uptrend.
• A falling LSMA indicates a downtrend.

2. Trade Signal Crossovers

• Bullish Signal: Price crosses above the LSMA line.
• Bearish Signal: Price crosses below the LSMA line.

3. Confirming Trend Strength

• Combine LSMA with structure-based tools like Order Blocks, PO3°, or HTF candles to validate trades.

4. Reversal Detection

• Sudden LSMA slope shifts or repeated crossovers may signal a trend change.

5. Noise Filtering

• Great for smoothing erratic price movement and highlighting dominant market direction during backtesting.

‍