1
Boolean conditions
A rule must resolve to true or false from known bar data and explicit parameters.
Lesson · Technical Indicators
Indicator-Based Trading Rules
Convert indicator observations into deterministic conditions, apply trend, strength, and volatility filters, visualize entry and exit events, detect contradictory rules, and export a machine-readable specification.
Synthetic educational data
Core concepts
Understand what the indicator calculates, how its parameters affect it, and what it cannot establish by itself.
2
Separate filter, trigger, and exit
A filter defines when a setup is allowed, a trigger defines the event, and an exit defines when the position state ends.
3
No performance claim
A logically complete rule can still lose money. Performance, robustness, costs, and overfitting belong to later testing courses.
Interactive lesson
Change the inputs, inspect the calculation, and compare the indicator with the underlying price data.
Events are calculated on completed synthetic bars. This lesson scores rule clarity and internal consistency, not profitability.
Rule specification
Interpretation
Scope: This simulator does not calculate returns, slippage, fees, position sizing, or statistical significance. Those belong to Trading Risk Management and Backtesting and Trading Systems.
Write an indicator rule specification
Every condition must be computable without subjective chart interpretation.
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Define the data and timing
Specify instrument, timeframe, adjusted data policy, and completed-bar timing.
2
Define filters
State trend, strength, volatility, and any market-regime requirements.
3
Define the trigger
Use an exact crossover, threshold transition, or rolling-boundary event.
4
Define state and exit
Prevent duplicate entries while active and specify exact exit, reset, and invalidation behavior.
Deterministic indicator rules
Score 0 / 0Choose the best answer.
Lesson rule
A machine-readable indicator rule must specify inputs, parameters, bar timing, Boolean conditions, state handling, and exit logic before it can be tested.
Common mistakes
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Writing subjective conditionsPhrases such as strong momentum or near support cannot be executed consistently without numerical definitions.
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Combining contradictory direction and triggerA long system using only bearish filters or triggers may be internally inconsistent even though the code runs.
3
Evaluating profitability before data integrityA backtest is meaningless if adjustment, warm-up, timing, and signal-state rules are undefined.
Completion standard
✓
Finish when another person or program can reproduce every event.
Export the rule, verify that all conditions and parameters are explicit, inspect contradictory combinations, and confirm that the same bar sequence produces the same entries and exits.
Calculation note: The simulator uses synthetic completed bars and standard course formulas. It intentionally omits performance calculations so a logically complete rule is not confused with a validated trading system.