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Indicator Threshold Solver


The Indicator Threshold solver compares an indicator against 4 possible threshold values. When the indicator value falls between thresholds a favorable value is generated calculated by linearly interpolated between the corresponding Output values.

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

Select the type of data you want the solver to analyze.  e.g. To detect when an indicator plot is above or below the zero line, or maybe when it is above 100 or below -100, select Indicator Value.  For a detailed explanation, see the section on Data Type Selection.

Thresholds

Please note, Threshold values must be entered in descending order. (I.E#1 A=5, B=4, C=3, D=2, E=1 I.E#2 A=2, B=1, C=0, D= -1, E= -2)

Sets the threshold value for condition Output → At A or Greater.  This is the highest value.

Sets the threshold value for condition Output → At B

Sets the threshold value for condition Output → At C

Sets the threshold value for condition Output → At D

 

Sets the threshold value for condition Output → At E or Less.  This is the lowest value.

Long Output

Sets the solver’s Long output value when the Indicator’s value is equal or greater than Thresholds → A value.

Sets the solver’s Long output value when the Indicator’s value is equal to Thresholds → B.  The output value is interpolated between At B to At A values, and At B to At C values.

Sets the solver’s Long output value when the Indicator’s value is equal to Thresholds → C.  The output value is interpolated between At C to At B values, and At C to At D values.

Sets the solver’s Long output value when the Indicator’s value is equal to Thresholds → C.  The output value is interpolated between At D to At C values, and At D to At E values.

Sets the solver’s Long output value when the Indicator’s value is equal or less than Thresholds → E value.

Short Output

Sets the solver’s Short output values as described in Long Output above.

Video Tutorial

This video is from our weekly Workshop on July 10th, 2015.
For more benefit please watch in full screen mode, as this video is recorded in HD.


Examples


Example 1A: The Basics

This demonstrates the basic function of Indicator Threshold solver using the Stochastic D.    This Solver will be used to detect over-bought, above 80, and over-sold, below 20, conditions of the Stochastic D.    In this first example the 50 line of the Stochastic will be used to switch the output between Long and Short.

  • Add the Indicator Threshold solver
  • Set Indicator to Stochastic D
  • Set Thresholds values as shown
  • Set Long Output > Greater Than 80 to 1
  • Set Short Output > Less Than 20 to 1

The chart below shows a Long output when the Stochastic D is above the 50 line, and a Short output when it is below the 50 line.

Example 1B: The Basics of Going Digital

This demonstrates the basic function of Indicator Threshold solver using the Stochastic D.    This time the Solver will be set to give a digital style output.

  • Add the Indicator Threshold solver
  • Set Indicator to Stochastic D
  • Set Thresholds values as shown
  • Set Long Output > Greater Than 80 to 1
  • Set Short Output > Less Than 20 to 1

Notice that At B & At C are set to 0, and thus no output values between 20 to 80.    The chart below only shows values above 80 and below 20.

Example 1C: The Basics of a Smooth Transition

This demonstrates the basic function of Indicator Threshold solver using the Stochastic D.  In this example the Solver’s output will transition between outputs always totaling 1.  As the Long output increases the Short output decreases, and vise versa.

  • Add the Indicator Threshold solver
  • Set Indicator to Stochastic D
  • Set Thresholds values as shown
  • Set Long Output > Greater Than 80 & At 80 to 1
  • Set Short Output > At 20 & Less Than 20 to 1

The chart below shows a Long output when the Stochastic D is above 20, and a Short output when it is below 80.

Example 2A: A Basic MACD Filter

This demonstrates the basic function of Indicator Threshold solver using the MACD line.  This Solver will be used to detect if the MACD is above the zero line for a Long(buy) filter, or below the zero line for a Short(sell) filter.  The zero line threshold of the MACD will be used to switch the output between Long and Short.

  • Add the Indicator Threshold solver
  • Set Indicator to the MACD
  • Leave the Thresholds values at zero
  • Set Long Output > Greater Than A to 1
  • Set Short Output > Less Than E to 1

The chart below shows a Long output when the MACD is above zero, and a Short output when it is below zero.