Risk Disclosure

Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. View full risk disclosure.

Indicator Crossover Solver


The Indicator Crossover solver generates a favorable output (signal) when Indicator A crossesIndicator B.  The signal is given in the direction of the Indicator A.  I.E. if Indicator A crosses aboveIndicator B then a Long signal is given.

Parameters

This section is common to all solvers.  A description can be found here.
This section is common to all solvers.  A description can be found here.

Input A

Select the type of data you want the solver to analyze for input source A.  e.g. To check if price is crossing over an indicator, select Price.  To check if an indicator plot is crossing over something else, select Indicator Value.  For a detailed explanation, see the section on Data Type Selection.

Input B

Select the type of data you want the solver to analyze for input source B.  e.g. To check if input A is crossing over price, select Price.  To check if input A is crossing over an indicator plot, select Indicator Value.  For a detailed explanation, see the section on Data Type Selection.

Settings

The number of bars to look back to check for a crossover occurrence. Tip:  What you will effectively see on the chart is the crossover signal  extending forward by this many bars.

Output A Crosses B

Sets the solver’s Long output value when Indicator A crosses above Indicator B and sets the Short output value when Indicator A crosses below Indicator B.

Sets the solver’s Long & Short output value when no crossover occurs.  Note, Settings → Lookback Period must expire before a No Crossover occurs.

Sets the solver’s Short output value when Indicator A crosses above Indicator B, and sets the Long output value when Indicator A crosses below Indicator B.  Note, this generates an output in the opposite direction of Crosses In Direction.

Decreases the output value by this amount, every bar after the crossing occurs until a value of zero or until Settings > Lookback Period expires.

Video Tutorial

This video is from our weekly Workshop on June 12th, 2015.
For more benefit please watch in full screen mode, as this video is recorded in HD.


Examples


Example 1: The Basics

This demonstrates the basic function of Indicator Crossover solver with the use of a 10 SMA & 30 EMA.

  • Add the Indicator Crossover solver
  • Set Indicator A to SMA 10
  • Set Indicator B to EMA 30

The chart below shows a Long signal when the SMA 10 crosses above the EMA 30, and a Short signal when the SMA 10 crosses below the EMA 30.

Example 2: Threshold Filter

This example uses the Stochastic K crossing the D.  Longs are permitted when the Stochastic D is below 45, and Shorts are permitted when the Stochastic D is above 55.

  • Add the Indicator Crossover solver
  • Set Indicator A to Stochastic K
  • Set Indicator B to Stochastic D

  • Add the Indicator Threshold solver (the permissive)
  • Set Indicator to Stochastic D
  • Set Threshold A to 100, B to 55, C to 45, D to 0
  • Set Long Output At C & At D to 1
  • Set Short Output At A & At B to 1

The left chart shows the Indicator Crossover solver only.  The right chart shows the Indicator Threshold solver only.

The chart below has both solvers enabled showing the signals as described above.  Notice in this simple 2 solver system that the Threshold solver output is seen showing the permissive for Longs or Shorts.

Example 3: AND Logic Node

Now lets use a AND logic node to observe how the output values change.

  • Switch to the Logic tab, and click New
  • Add a AND logic node
  • Connect the leaders as shown

Here we see the AND node gives an output only when both solvers have an output in the same direction.