Strategy guidelines

The reference. Anatomy, indicator catalogue, sizing, time periods, and the mistakes that ruin good ideas.

Anatomy of a strategy

Every strategy needs four parts. Anything else is decoration.

Universe

The list of tickers. Five to fifty US stocks works best.

Bars

Daily, weekly, or monthly. No intraday.

Entry

When to buy. Indicator + filter + price condition.

Exit

When to sell. Target, stop, time limit, or signal flip.

Most edges fall into one of these. Pick one. Don't mix.

Buy strength. Sell weakness. Sit out the rest.

Buy panics in strong names. Hold for a snap-back.

Buy when price clears resistance. Stop just below.

Long the cheaper of two correlated names, short the other.

Tenachine supports the common TA-Lib indicators. Full list at ta-lib.org/functions.

Indicator	When to use
SMA / EMA	Trend filter. 50/200-day are the classic.
RSI	Mean reversion. Cross 30 = oversold, cross 70 = overbought.
MACD	Trend confirmation. Histogram crossing 0 is the trigger.
ATR	Volatility-based stops and position sizing.
Bollinger Bands	Volatility envelope. Touch the band, then revert.
Donchian	Channel breakouts. The original turtle entry.
ADX	Trend strength filter. Above 25 = something to trade.
Stochastic	Mean reversion alternative to RSI.

Default: risk 1% of equity per trade. The position size is calculated from your stop distance, so a wider stop means a smaller position.

If you don't set a stop, we use a 2×ATR trailing stop. If you don't set a risk budget, we cap each position at 10% of equity.

Using data from the close of bar N to make a trade on bar N. We use bar N+1's open for fills.

Backtesting on five tickers gives noisy results. Use at least twenty if you're claiming an edge.

Buy rules without a clear exit are not strategies. Add a target, stop, or time limit.

If your indicator parameters look like a phone number, you've overfit. Test robustness by varying them ±20%.