Core concepts
Strategies and rules
A strategy here is a rule a computer can follow on every trading day without judgement: what to hold, when to buy and when to sell.
On this page
A rule, not a hunch
A rule says exactly what to do on each day, using only what was known by then. Two people following it would make the same trades.
For example, the first template in the library holds SPY on the days when this is true: "SPY's 50-day simple moving average is above its 200-day simple moving average". Sell and hold cash when the 50-day falls back below the 200-day
The parts of a rule
- What to trade
- One share or fund, or a list of them.
- When to buy
- The condition that starts a position.
- When to sell
- The condition, stop, target or time limit that ends it.
- How often it checks
- Every trading day for a timing rule; every month or quarter for a ranking or a portfolio.
- How much to hold
- The whole account in one name, equal parts across a list, or set weights.
Kinds of rule
- Timing rules: in or out of one share: Rules that decide, each day, whether to hold a share or fund or to sit in cash.
- Ranking rules: hold the leaders of a list: Rules that score a list of shares or funds and hold the ones at the top, swapping as the order changes.
- Holding several things at set weights: Portfolios with no buy or sell signal: fixed weights, buying and holding, and risk parity.
- Conditions you can combine: The single tests a rule of several conditions is built from, each of which can also stand alone.
- Ways to sell, shorts, and what cannot run yet: Stops, profit targets and time limits, selling short, and the rules the engine does not run yet.
Settings the agent fills in
When you leave a setting out, the agent uses a standard one and says which on the card. The rule reference lists them.
What a rule cannot read
A rule reads past prices, and a few stored market-wide series such as the VIX. It cannot read news, earnings dates or company filings as they came out: those are not loaded into the engine. What cannot run yet
Related
- Rule referenceRule referenceEvery kind of rule the engine runs, with what it does, the settings the agent uses when you name none, and an example to try.
- Strategy patternsTrend followingBe in while prices have been rising and out while they have been falling, judged by moving averages.
- Education CentreStart here: five ideas, from zeroWhat a share is, what a fund is, what a backtest is, what simply holding means and what a worst fall is.
- Getting startedYour first testWrite an idea in plain words, check what the agent read, and run it. This page walks through one test from the box to the result.
These pages describe how Quantis Trade works and what its tests show about the past. They are not forecasts and not advice.