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FAQ: Strategy

FAQ: Strategy

Question:

    What is a strategy?

Answer:

    A strategy, in TASM terminology, stands for a combination of statements that generate BUY (LONG) and SELL (SHORT) signals. In its simplest form it is an Indicator and Action combination on both BUY and SELL sides.

Question:

    What is an indicator?

Answer:

    In general terms, an indicator is a metric which is derived from the price and/or other data of a security. Within TASM, an indicator refers to both the visual object on the strategy panel and the mathematical construct that underlies it. Note however that the term indicator may refer to any function in TASM as long as it can receive standard or processed market data to generate and transformed version of it.

Question:

    What is an action?

Answer:

    In TASM terminology, an action is a binary function that generates a signal when the input data (i.e. output of an indicator) meets certain criteria. For instance, a MIN function will trigger a signal when the incoming data is at its minimum. Similarly GT (Greater Than) action will generate signal when the incoming data exceeds the GT parameter. Every TASM statement should end with an action.

Question:

    How do I change parameters of an indicator?

Answer:

    Drag and drop an indicator on one of the statement panels and click on it. This will pop up a panel with sliders on it, which you can use to change its parameters. Note that indicators may have any number of parameters including 0.

Question:

    How do I change parameters of an action?

Answer:

    Drag and drop an action on one of the statement panels and click on it. This will pop up a panel with sliders on it, which you can use to change its parameters. Note that actions may have any number of parameters including 0.

Question:

    Why my strategy is not creating any signals?

Answer:

    Assuming that you have a valid strategy and data symbol, your statements might not be generating any signals with the parameters you have provided. Note that a signal will be generated only when the processed indicator data meets an action's requirements. So if you create a strategy, output of which does not meet its action's requirements, no signals will be generated. Try changing your parameters and backtesting again. It is often a good idea to start with one of the top strategies or samples and use it as a template.

Question:

    Why my strategy performance is changing every day?

Answer:

    Your strategy is essentially a combination of rules that use market data to calculate a signal. At the end of every day new market data arrives and all of your strategies are recalculated with the backtester automatically. A successful strategy will continue to perform well over time when the underlying algorithm was able to generalize the data not just memorized it.