MCD R-Squared: Historical Fit, Not Trade Odds

Summary

Hollow Point Trading shares an educational look at why R-squared measures historical fit, not the probability that the next trade wins. The example uses ordinary least squares with an intercept and 20 completed five-minute McDonald's closes from October 8, 2026, to explain how squared variation is measured.

https://youtu.be/eWPzhwnnguc

MCD: R squared measures historical fit, not next trade odds #MCD #R...

MCD R-Squared: Historical Fit, Not Trade Odds
R squared is not the probability that the next trade wins. This historical McDonald's IEX example fits twenty completed five minute closes from October eighth, twenty twenty six. We use ordinary least squares with an intercept and interval numbers from zero through nineteen. Total squared variation measures each close against the sample mean. Re...

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