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Technical trading signals, which were introduced in the charts section of the manual, are the end goal of any technical analysis-based trading system. These signals tell the user when to buy or sell a stock. In other words, technical trading signals are used to time the buying and selling of stocks. Other tools, such as stock screeners can be used to determine which stocks should be candidates for market timing analysis.
Trading signals appear as green (buy) or red (sell) arrows on the charts:
Trading signals become even more powerful when used with screeners to scour the market for the best technical picks or when used in conjunction with strategies to time portfolio purchases.
Creation of trading signals
Stockworm conceptually divides trading signals into long (buy) and short (sell) formulas. Each formula is written in a simple but powerful scripting language. A buy signal is issued when the buy formula is true and the short formula is false. A sell signal is issued when the sell formula is true and the buy formula is false.
You can specify only the long formula (the short formula will be true when the long formula is false) only the short formula (the long formula will be true when the short formula is false) or both (the formulas will be evaluated independently).
Formulas are composed of one or more technical indicator lines. Functions can be applied to modify the value of the indicator lines (e.g. the EMA function takes the exponential moving average of a line, given an averaging period: EMA(LINE, PERIOD)). Operators are the glue which binds the functions/lines together (e.g. "CLOSE > 5" or "CLOSE <= EMA(CLOSE, 10)").
The chapters which follow will discuss in more detail the creation of custom trading signals. Specific points of interest include a description of Stockworm technical indicators and of the scripting language syntax.
Trading signal list
When you visit the trading signals section (within investing strategies), you will see tabs for all of your custom trading signals ('my signals'), along with tabls for Stockworm trading signals ('stockworm signals') and signals contributed by the Stockworm community ('community signals'). You can sort the my signals list by name or date modified, view any signal by clicking on the signal name, or rename, delete, or share the signal:
