For example, you can have the bot check the 14-day RSI to determine if the security is overbought or oversold.
You can also check more indicators, such as MACD and CCI. The bot will automatically check both technical indicators before progressing through the automation and eventually opening a new position.
You can group decisions with “and/or” functionality. So, either both decisions must be true, or one of the decisions must be true. Grouped recipes allow targeted decisions for more precision inside an automation.
You can always test the automation to see each symbol’s indicator reading using real-time, live market data. Testing can help you determine if the bot will open a position or where an automation would end.
It’s a challenge to track multiple technical indicators to identify trading opportunities. With bots, you can leverage the power of automation to evaluate multiple indicators simultaneously in a single automation and enter new positions only when your criteria are met.
One of the really cool things you can do with your bots in automations in Option Alpha is group multiple technical indicators signals inside of your automations. We're going to show you how to do this here inside of this demo scanner.
Now, we started the scanner with a symbol loop. Symbol loops tell the bot to loop though a particular list of ticker symbols with the ultimate goal of trying to look for a potential opportunity to open a position. In our case, we're looping through a mini watchlist of ETFs.
Specifically, we're telling the bot to loop through SPY, GLD, XLF, EEM, TLT, EFA, and FXI.
Now we have to tell the bot what to do once it starts looping through each of those tickers. Next, we're going to add a decision. This is where we can start to use technical indicators and start to group multiple technical indicators into one decision block.
Using our decision recipes, we're going to go down to our technical indicator section. And down in the indicator section, we can choose from all of the available technical indicator recipes.
Note that in some cases, there's multiple technical indicators available inside of a recipe.
First, we'll start with this first recipe here. We'll connect the symbol field to the symbol that the bot is currently looping through. This ensures that it checks each of the symbols that we have in our symbol loop and checks the technical details for that particular symbol before moving on to the next.
Next, we'll choose our timeline. We'll keep this one as a 14 day timeline and then choose RSI.
Again, note that inside of this recipe, you have that use the same structure, so you can multiple technical indicators swap this for something like ADX, CCI, or CML.
Again, just remember to change the value that corresponds with that particular indicator.
Next, we're going to check the reading on an intraday basis and check and see if the 14 day RSI reading for our particular symbol is currently above 80, which is a pretty general overbought reading for RSI.
Once we're good to go here, we simply can hit "Save." That adds our first technical indicator to this decision block. But we're not done yet because we want to group multiple technical indicators inside of our decision block.
So we're going to add the plus icon here and then go back down to our technical recipe list at the bottom. Next, we're going to check a MACD reading. We want to go again to connect this to the current symbol that it's looping through using custom inputs. Then we can set all of our MACD settings for a fast period, slow period, signal period, and the type of MACD line that we want to use.
Next, we're going to check and see if the MACD lines is below the signal line on an intraday basis. If it is, that might suggest that we have, again, another overbought and now turning bearish signal for our potential trading strategy. Once we're good to go here, we simply hit "save" and now add that to our list of decisions.
Now that we've added two decisions to this one decision action, you'll notice that we have the ability to change the parameters here to use or statement or and statements. This is how we can start to group decisions together and make really flexible determinations based on exactly how we want to use this inside of our strategy.
In our case, we want both of these to be true. We want the symbols 14 day RSI reading to be above 80, and we want the MACD line to be below the signal line on an intraday basis. Both of those have to be true in order for us to feel comfortable enough to let the bot continue down the "yes" path, potentially getting to the point of opening a new position.
But we're not done. We can actually include more technical indicators here as well. So we can go down to our list of technical indicators, and let's use that same recipe that we had before. Only this time, we'll switch it up and use not an RSI reading but a CCI reading above 150.
Again, we're going to use more generic reading that's more equivalent to the indicator that we're using.
In this case, CCI readings which can go +150 or sometimes -150. So once we're good to go here, we simply hit "Save." Now we have three sets of technical indicators. All using the same grouped decision. This means that every time the automation runs, it's going to loop through each individual ticker symbol, and for each symbol, it's going to consistently check these three technical readings. And then it's going to make an evaluation if those readings are enough to let the bot continue down the yes path.
Once we're good to go by adding our grouped set of technical indicators, we can simply just hit "Save." That gets added underneath of our position loop, and we can actually test this logic and see what's some of the readings would be for some of these indicators right now. By going up to the button at the top to run a test, we can choose to run a test inside of one of our bots and test the logic of our automation.
We start the test, and we can see that the test finished and gives us all the information on the decisions and the criteria that it would've used had we turn this on in a live environment. Again, this is a great way to stress test your logic and ensure that the bot is set up exactly how you want. In this case, it started looping through the symbols that we told to loop through, and for example, in SPY here, you can see that it got a no answer to the decision block.
To get more information on what the readings were for these technical indicators, you can just click over to the decision block. Here you can see that the bot only made one decision of the three that we added to our group. And this is exactly how we told it to work because we used and decision for all of our technical indicators. This meant that in order for the bot to continue down the yes path, all of the technical indicators had to result in a true answer.
In this case, RSI was the first one that it encountered, and RSI for SPY was not above 80. So the bot didn't need to make any other decisions or check the other technicals because the bot resulted in a no answer for the first decision. This ensures that it still adhering to the logic that you set inside of your actual recipe.
If you wanted to change this up, and maybe go in and change all of these statements to or statements. Then the bot would actually check each individual recipe for the technical indicator. To test this logic, we can simply just "Save" this new changes and then go back up and run our test.
Choose our same demo bot that we're going to run our test in, and now you can see that when I go to the decision log for SPY, it is now checking all of the different technical indicators. That's because it was looking for one of those technical indicators to result in a yes answer. It was checking RSI, MACD, and CCI for this particular ticker that we're looking at.
Notice that if I go back to the decision log that I can toggle through each of the different tickers that I have inside of my list. Inside of XLF, we notice that the decision log created a yes answer. To get more information, we can just click over to the decision log and see which technical indicator resulted in a yes answer. In this case, it was CCI. So it wasn't until we got to the third technical indicator that we were checking in this grouped block of decisions that we found something that was overbought enough for us to possibly continue down the yes path.
So inside of these decision blocks, you can group and add multiple technical indicators. You're not limited in how many you add, and you can check all the different logic that you want inside of your automations. Remember, bots are really powerful and fast, and efficient. So they can check these over and over again until the right market criteria presents itself that would lead you to making a trade.
You can use grouped decisions for technical indicators inside of your scanners, as well as your monitor automations to help you exit and enter positions more intelligently. Plus, anytime that you want to make a change to one of your indicators, you can simply change any of the custom inputs or go into the actual indicator recipe itself and make a change very easily.
Once your change is done, simply hit "Save," and now your new changes are reflected in your automation.
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