Smart Studies is an advanced backtesting system for creating, tweaking, and testing customized trading strategies. By leveraging a wide variety of technical studies and designing complex trading signals, users can test their strategies based on historical data to make informed trading decisions. This document provides an in-depth look at how to configure and operate the Smart Studies System. It's intended to be a comprehensive guide for support teams and end-users.

Studies

Studies are essential components of our Smart Studies System. They are based on specific methods of technical analysis, such as Moving Average Convergence Divergence (MACD) or Relative Strength Index (RSI) and many more. Users can select one or more studies when creating their strategies.

When a user selects multiple studies, the Smart Studies System treats them as a conjunctive (AND) condition, meaning all the conditions need to be met for the overall condition to be true.

Further customization of a study can be done by specifying a comparison line and defining the interaction between the study line and the comparison line. This can take various forms, such as specifying that the RSI crosses above a certain threshold or that the 14-day RSI stays above the 21 RSI threshold line.

Studies available on Smart Studies Tab:

ADX

The Average Directional Index (ADX) is used to quantify the strength and intensity of a market trend.

It measures the extent to which a market is trending and provides insights into the potential for trend continuation or trend reversal.

Bollinger Bands

The Bollinger Bands consist of three lines plotted on a price chart: the middle band, which is a simple moving average (typically 20 periods), and the upper and lower bands, which are calculated based on a specified number of standard deviations from the middle band. Bollinger Bands dynamically adjust to market volatility, expanding during periods of increased volatility and contracting during periods of decreased volatility.

Stock Value

Stock value refers to the price at which a share of a particular stock is currently trading in the market. It represents the monetary worth of ownership in a publicly traded company. The stock value can fluctuate throughout the trading day based on supply and demand dynamics, investor sentiment, market conditions, and company-specific factors.

DMI

The Directional Movement Index (DMI) is a technical indicator used to assess the strength and direction of a price trend. It consists of two lines: the Positive Directional Indicator (+DI) and the Negative Directional Indicator (-DI). The +DI measures upward price movement, while the -DI measures downward movement. By comparing these indicators, traders can identify whether a market is experiencing bullish or bearish momentum. The DMI also includes the Average Directional Index (ADX), which quantifies the strength of the trend.

Heikin-Ashi

Unlike traditional candlestick charts, Heikin-Ashi charts incorporate elements of price and time to offer a smoothed representation of price movements.

In Heikin-Ashi charts, each candlestick is calculated based on the average values of the previous candlestick, considering the open, high, low, and close prices. The calculation takes into account the current and prior candlestick's midpoint, which results in a modified representation of price action.

Hull MA

The Hull Moving Average (HMA) is a popular technical indicator developed by Alan Hull. It aims to provide a smoother and more responsive moving average compared to traditional moving averages. The HMA achieves this by utilizing a weighted moving average based on a specific period.

Keltner Channel

The Keltner Channel is a technical indicator consisting of an upper and lower channel band derived from an exponential moving average (EMA) and an Average True Range (ATR) indicator, and is commonly used to identify potential price breakouts, gauge overbought and oversold conditions, and generate buy or sell signals.

Moving Average (MA)

The Moving Average (MA) is a widely used technical indicator that calculates the average price of an asset over a specific period. It smooths out price fluctuations and provides a clearer picture of the underlying trend.

MACD

The Moving Average Convergence Divergence (MACD) is a popular technical indicator used in trading analysis to identify potential buy and sell signals.

Parabolic SAR

The Parabolic SAR (Stop and Reverse) is a technical indicator used to determine potential entry and exit points in a trending market. During an uptrend, the SAR dots are plotted below the price and gradually move upward. In a downtrend, the SAR dots are plotted above the price and move downward. The SAR dots act as trailing stop-loss levels, helping traders identify potential exit points.

RSI

The Relative Strength Index (RSI) is a popular momentum oscillator used in technical analysis to measure the speed and change of price movements. It helps identify overbought and oversold conditions in a market, indicating potential trend reversals.

Slow Stochastic

The Slow Stochastic is a momentum oscillator used in technical analysis to identify overbought and oversold conditions in a market. It is a variation of the Stochastic Oscillator that includes additional smoothing to reduce noise and provide a more accurate representation of price momentum.

Stochastic

The Stochastic oscillator is a popular momentum indicator used in technical analysis to identify overbought and oversold conditions in a market. It compares the current closing price to its price range over a specific period.

Williams %R

The Williams %R is a momentum oscillator used to identify overbought and oversold conditions in a market. The Williams %R is calculated based on the relationship between the current closing price and the highest-high and lowest-low prices over a specified period.

Interactions

Our comprehensive list of Interactions allow you to establish rules and conditions for generating trading signals or triggering specific actions within your strategies. By combining different indicators and their interactions, you’re able to create complex strategies tailored to your trading preferences and market analysis.

Signals

A signal or condition in the Smart Studies system denotes a particular trading action and comprises one or more studies conjoined with each other through interactions. The three types of signals are: Buy When, Sell When, and Custom Exit.

On bullish/long strategies, the “Buy When” is an Entry signal, and the “Sell When” or “Custom Exit” are Exit signals. On the other hand, on bearish/short strategies, the “Sell When” is an Entry signal, and the “Buy When” or “Custom Exit” are Exit signals.

A user can create up to eight signals. Each signal of the same type is treated as a disjunctive (OR) condition, which means if any signal within a type group becomes true, a trigger for that specific action is registered by the system.

Custom Exits:

Strategies

A Strategy is a probability model or statistical data, resulting from a combination of a set group of one or many Entry signals, and one or many Exit signals applied to the price action of a financial instrument over a period of time in the past (or Lookback Period).

To ensure valid backtesting results from our Smart Studies System, at least one Exit signal, i.e., either a Sell signal with at least one study or a Custom Exit signal, needs to be defined.

Alerts

Once the user has configured their studies and signals and they are satisfied with the backtesting results, they can set up Alerts to be notified of the ongoing status of their strategy. The alert system can inform the user when their strategy is starting, active, or ending. This proactive alert system is a standout feature of our Smart Studies System, keeping users informed and engaged with their trading strategies.

Alert button

Long/Short Menu

Lookback Period Menu

Strategy Name

Strategy Stats Panel

Strategy Chart Add-Ons

Smart Studies Settings