Which of the following describes how linear regression trading signals instruct buyers?

The correct choice, which states to buy when the slope is positive, aligns with the fundamental principles of using linear regression in trading strategies. A positive slope indicates that the prices are trending upward over the specified period. This trend suggests bullish conditions, where the market is generally perceived to be gaining strength or momentum. Traders look for confirmation of this trend through the slope of the regression line, which acts as an indicator of the overall market direction.

When executing trading strategies based on linear regression, a positive slope signals a potential opportunity for buyers. Since the analysis aims to capitalize on price movements, entering a position when the slope is positive allows traders to align their actions with the prevailing market trends, thereby improving their chances of successful trades.

Understanding that the slope is indicative of trend strength helps traders make informed decisions about when to enter the market and create a strategy that is responsive to changing conditions.