Enhancing Indicator Comparisons with Weight & Bias

In the dynamic world of trading indicators, sometimes a simple comparison isn’t enough. QuantMage steps up the game by offering the ability to adjust the weight (multiplier) and bias (offset) when comparing two indicators. This feature unlocks a new dimension of flexibility, allowing for nuanced and sophisticated strategies.

Navigating to the Feature

To access this functionality, hover your cursor over the right-hand side indicator in a condition. A tooltip will appear:

For adjustments, right-click to open a popup where you can edit the weight and bias:

Practical Applications

For instance, the Aroon indicator, which is the difference of two related indicators, Aroon-Up and Aroon-Down, is no longer strictly necessary since you can use a bias with the latter two. The following two conditions are basically the same:

Or, take the concept of a ratio indicator like the Sharpe Ratio. You can emulate it by applying a weight: Here, you’re essentially checking if the 1-year (with 252 market days) rolling Sharpe of SPY exceeds 1.30.

A Word of Caution

This powerful tool, when used judiciously, can significantly enhance your spell. However, it’s important to use it sparingly to avoid the pitfalls of overfitting. The warning tooltip in yellow serves as a gentle reminder of this responsibility.

With QuantMage, you’re equipped to make more informed, nuanced comparisons in your investment strategy. Happy investing!