Getting Started: Indicator Strategies

Indicator strategies use technical analysis — mathematical calculations applied to price and volume data — to generate buy and sell signals. QuanterLab organizes these into four strategy families, each with a consistent set of tools.

The Four Strategy Families

Each family represents a different market hypothesis:

• Mean Reversion — Prices tend to return to a statistical average. Uses indicators like RSI, Bollinger Bands, and statistical tests (Hurst Exponent, Half-Life). Best suited for range-bound or oscillating assets
• Momentum — Strong trends tend to continue. Uses MACD, ADX, ROC, Aroon, and TSI. Best suited for trending markets with clear directional moves
• Crossover — Moving average crossovers signal trend shifts. Uses EMA/SMA crossover systems with ADX confirmation. Captures medium-term trend changes
• Breakout — Price breaking through support/resistance levels signals a new move. Uses Bollinger Band squeeze, Keltner Channel, and Donchian Channel breakout detection

Three Tools Per Family

Every strategy family provides the same three-tool workflow:

1. Scanner

Scans an entire stock index (S&P 500, NASDAQ 100, FTSE 100, DAX 40, CAC 40, Euro STOXX 50, Nikkei 225, Hang Seng) and ranks every stock by how well it fits the strategy family. For example, the Mean Reversion scanner ranks stocks by Hurst Exponent, Variance Ratio, and Half-Life. The Momentum scanner ranks by trend persistence, ADX, and historical momentum win rate.

2. Signal Overlay

A visual exploration tool. Enter a ticker, select a primary indicator and optional confirmation layer, and the module overlays buy/sell signals directly on the price chart. The chart intentionally hides 30% of the data — you see signals on 70% and the performance statistics cover 100%. This prevents unconscious curve fitting (adjusting parameters to match patterns you can already see).

Use the Signal Overlay to develop intuition about which indicators work well on a particular stock before building a full strategy.

3. Strategy Builder

The full strategy construction tool for each family. You configure:

1. Entry indicator and conditions — Select an indicator and set the trigger (e.g., RSI crosses below 30)
2. Confirmation layer — Add a second indicator that must also be true (e.g., Bollinger %B below 0.2)
3. Exit conditions — Define when to close a position (e.g., RSI crosses above 70, or a time-based exit)
4. Risk management — Stop-loss percentage, take-profit target, trade direction (long or short)
5. Asset and timeframe — Ticker, candle timeframe (5m to daily), and lookback duration

Click Apply & Show Trades to run the backtest. The results show a trade table with every entry and exit, win rate, average gain vs average loss, maximum drawdown, Sharpe ratio, and a performance chart comparing your strategy to buy-and-hold.

Advanced Tools

Beyond the four strategy families, the Advanced section provides two powerful tools:

Overlay/Builder (Universal)

A single module that offers access to all 50+ indicators from every family. Unlike the family-specific builders which limit your indicator choices, the Overlay/Builder lets you mix any indicators across families. Key features:

• Three condition layers — Entry, Confirmation, and Exit, each with independent indicator selection
• In-Sample / Out-of-Sample testing — Reserve 20-40% of your data as unseen data. Build on the in-sample portion, then reveal out-of-sample results to check for overfitting
• Standalone code generation — Download a Python script that replicates your exact strategy independently
• Direction support — Long or Short trading with direction-aware stop-loss, take-profit, and P&L calculations

Portfolio Backtester

Test up to 10 saved strategy configs together in a single backtest with shared capital. This module reads configs you have saved from any Strategy Builder or the Overlay/Builder. It runs each config on its own ticker and timeframe, manages capital allocation across all positions, and produces a combined equity curve, per-config breakdown, and correlation analysis.

Recommended Workflow