Here concepts relating to algorithms are introduced.
Algorithm
General definition
Trading systems are built using trading algorithms.
In Trading Conceiver by trading algorithm we commonly refer to the output or result of internal calculations.
Only the outputs are relevant for the user, the calculations are performed internally and transparent to the user.
The two kinds of algorithms the user has to deal with are:
Elementary algorithms
Combining of the Tabs
This is just a conceptual difference, but they are represented and treated the same way, whatever they represent.
Elementary algorithms
The building blocks of a trading system built with Trading Conceiver are elementary trading algorithms.
These are already implemented.
They are also simple, hence the name.
We give enough information to the user to understand unequivocally what these algorithms do.
Usually the name of the algorithm is enough, that's why sometimes they are pretty long.
Anyway, we always document the formula the algorithm is based on or the Boolean logic of the algorithm, although it is not necessary to know that.
A theoretical example might be:
Close greater than Simple Moving Average [1]
where we check whether the close price is greater then the SMA.
Combining of The Tabs
To build a trading system, elementary algorithms are combined together.
The combination occurs for each of the 6 tabs of the Composer.
You will end up with 6 algorithms, the combinations of each tab.
The combination is performed through logical operators, like OR and AND, and the combination is still an algorithm.
Output: true or false
The output of all algorithms takes the form of true / false values.
Each algorithm, of whatever type, can only be true or false.
The internal logic always reports only if the algorithm is satisfied or not.
The algorithm consists of checking if some condition is true or false, and the result is output.
In the theoretical example [1] provided above, we would check whether is true or false that the close price is greater than the SMA.
In Tables
In the table, trading algorithms are rendered as a check-box, selected if the algorithm is true, deselected if the trading algorithm is false.
0 and 1
A typical alternative representation of true and false, is with 0 and 1:
true ↔ 1
false ↔ 0
In Charts
This is the representation used in charts.
Other Information
On a case by case basis, other information might be available.
For instance for stop loss algorithms also the stop loss level is reported.
This is just for convenience of the user, who does't need to know that.
Intraday
Intradaily
In general, Trading Conceiver operates not only at Close, but also at Open and Threshold.
So the output of the algorithms will be for the Open, Threshold and Close of each entry in the historical file.
This means there will be 3 columns for each algorithm.
Only at Close
Some algorithms, by their nature or because of some choices by the user, operate only at Close.
In that case, only the Close value is reported, and the Open and Threshold are omitted.
This means there will be just 1 column for each algorithm.
The output of all algorithms takes the form of true / false values.
Each algorithm, of whatever type, can only be true or false.
The internal logic always reports only if the algorithm is satisfied or not.
The algorithm consists of checking if some condition is true or false, and the result is output.
In the theoretical example [1] provided above, we would check whether is true or false that the close price is greater than the SMA.
A typical alternative representation of true and false, is with 0 and 1:
In general, Trading Conceiver operates not only at Close, but also at Open and Threshold.
So the output of the algorithms will be for the Open, Threshold and Close of each entry in the historical file.
This means there will be 3 columns for each algorithm.