Indicators

How Indicators Are Used in PredictBack

Indicators transform raw price data into structured signals that can be used inside rule-based strategies. In PredictBack, indicators are composable building blocks—used as inputs to conditions, logic gates, and trade actions.

Signals are combined using:

• Comparisons (>, <, ≥, ≤)

• Logical gates (AND / OR)

• Trade actions only occur when explicit rules evaluate to true

This separation ensures strategies are:

• Transparent

• Deterministic

• Easy to diagnose when they fail

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Glossary

Simple Moving Average (SMA)

• Computes the arithmetic mean of price over a fixed lookback window

• Smooths short-term noise to highlight trend direction

• Responds slowly to price changes

Inputs

• Name

  • User-defined identifier for the indicator instance (e.g., sma_20)

  • Used to reference this output elsewhere in the strategy

• Period

  • Number of observations used in the moving average

  • Larger values → smoother, slower signal

  • Smaller values → noisier, faster signal

Output

• Single numeric value representing the average price over the lookback window

Common uses

• Trend identification

• Dynamic support / resistance

• Baseline signal for crossovers

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Exponential Moving Average (EMA)

• A weighted moving average that emphasizes recent prices

• Reacts faster than SMA to price changes

• More responsive in volatile or fast-moving markets

Inputs

• Name

  • User-defined identifier (e.g., ema_20)

• Period

  • Lookback window controlling exponential decay

  • Recent prices receive higher weight than older prices

Output

• Single numeric value with faster responsiveness than SMA

Common uses

• Short-term trend detection

• Momentum confirmation

• Faster crossover signals than SMA

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Relative Strength Index (RSI)

• Momentum oscillator bounded between 0 and 100

• Measures the speed and magnitude of recent price moves

Inputs

• Name

  • User-defined identifier (e.g., rsi_14)

• Period

  • Lookback window for momentum calculation

  • Common defaults: 14, 21

  • Shorter periods → more reactive

  • Longer periods → smoother oscillator

Output

• Oscillator bounded in [0,100][0, 100][0,100]

Typical interpretation

• RSI > 70 → overbought

• RSI < 30 → oversold

Common uses

• Mean reversion signals

• Momentum exhaustion detection

• Entry / exit filters

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Moving Average Convergence Divergence (MACD)

• Measures the difference between two moving averages

• Often paired with a signal line and histogram

Inputs

• Name

  • User-defined identifier (e.g., macd)

• Fast

  • Period for the fast EMA

  • Controls short-term sensitivity

• Slow

  • Period for the slow EMA

  • Controls long-term trend baseline

• Signal

  • EMA period applied to the MACD line

  • Used for smoothing and crossovers

Outputs

• MACD value

• Signal value (used in comparisons or crossovers)

Derived Terms

• MACD Line = Fast EMA − Slow EMA

• Signal Line = EMA(MACD Line, Signal period)

Common uses

• Trend strength confirmation

• Momentum shifts

• Crossover-based entries and exits

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Bollinger Bands

• Consist of a moving average with upper and lower bands

• Bands expand and contract based on volatility

Inputs

• Name

  • User-defined identifier (e.g., bb)

• Period

  • Lookback window for the central moving average

• Std Dev

  • Multiplier applied to the standard deviation

  • Controls band width and sensitivity to volatility

Outputs

• Upper band value

• Middle band value

• Lower band value

Derived Terms

• Middle Band = Moving Average

• Upper Band = MA + (Std Dev × σ)

• Lower Band = MA − (Std Dev × σ)

Common uses

• Volatility regimes

• Mean reversion entries

• Breakout detection