A Custom Indicator is an arithmetic expression, built using RTL, the Investor/RT Real Time Language, that can be graphed in an Investor/RT chart. The RTL Language used to specify custom indicators is essential the same language used to specify Scans and Trading Signals, with a few powerful extensions. RTL has been extended in Investor/RT 4.0 to enable any built-in technical indicator to operate on any arithmetic expression, including other technical indicators. A quick example will illustrate the power of the major extension of Investor/RT:
Suppose you want to use a triple smoothed RSI indicator in your analysis. Investor/RT has a built-in RSI indicator, but the built-in RSI has only one smoothing option, not three. This calls for a Custom Indicator. Choose "Custom Indicator" from the Setup Menu. The Custom Indicator Setup window is similar to the Scan Setup window. It has the same list of primitives on the left and an entry box for writing the RTL expression (formula) for the Custom Indicator. Type in:
the "Check" button to check the RTL expression for correctness.
Investor/RT will prompt you for the RSI and MA parameters and add the MA
and RSI tokens to the list on the right automatically. This is a new
convenience feature in 4.0 for writing both scans and custom indicators.
It not necessary to first list all the elements you wish to use in a scan
or custom indicator. Simply write the formula using the tokens as listed
in the left side list and Investor/RT will add them to the list of
indicators on the right automatically.
Notice that the smoothing is performed three times in succession using the same moving average specifications, i.e. if the token MA is setup as a simple-9-period moving average, then the RSI will be smoothed three times using a simple-9-period average. If different smoothing specifications are desired for each moving average, add the MA token three times to the list of tokens, giving each MA it's own specification. Then re-name the MA tokens MAa, Mab, and MAc. Finally, edit the formula to read.
Click the "Save" button to save the revised
definition of TRIPLE_MA_RSI, Investor/RT will automatically update the
chart with the revised custom indicators, evaluate for formula, and redraw
the chart using the new definition.
(MA + CL)/HI
or they may be used (invoked) to operate on any arbitrary RTL expression as in:
MA( (HI + LO)/2)
In the first case ((MA + CL)/HI), the MA is calculated
using the instrument data in the chart. In the second case, MA is followed
immediately by a left parenthesis. This indicates that the MA technical
indicator is to operate on the RTL expression that follows (not on the
instrument data itself). So Investor/RT first calculates an array of data
using the formula (HI + LO/2) and then it calculates the moving average of
that array using the specification for MA, and draws the result.
MAX( (RSI(MA(HI)), 5)
In this example, Investor/RT first calculates the moving
average of the HI prices and then calculates an RSI on that moving
average. Finally the MAX function is evaluated to draw a line showing the
maximum RSI value calculated in the preceding five periods.
MAX( (RSI(MA(HI)), 5) > 70
finds all instruments having a MAX RSI of 70 or higher in
the last 5 periods. If you add that scan to chart using the Scan technical
indicator, Investor/RT will display markers on the chart wherever the RTL expression is true. Similarly, SUM ( (RSI > 70), 21) > 10 finds all
instruments whose RSI has exceeded 70 in at least 10 of the preceding 21
can be made more efficient by writing it as:
assuming you setup RSI to calculate and perform the first
smoothing using the same smoothing parameters as MA uses.
SUM( (RSI > 70) , 9)
for example, first evaluates:
RSI > 70
for each point in the chart. Conceptually, this produces a series of data points where 0 indicates the condition is false and 1 indicates true. The SUM( x, y) function then sums these zero and one values for the preceding 9 periods for each point in the graph. The result will be a line whose value ranges between 0 and 9 where each point on the line tells you how many times in the preceding 9 period that RSI has been above 70.
New in 7.3
Consider for example the custom indicator MA * (CL >= MA), where MA is some moving average. This indicator will have the value zero during periods that the close of the bar is below the moving average; otherwise the indicator value is simply the MA itself. If you put this custom indicator into a chart pane by itself using the new (third) drawing option, the line will be visible only during periods that CL >= MA. If you add the same moving average to the same pane directly using a different line drawing color, the overlaying effect of the MA and custom indicator will give you a two-color line effect with the MA values filling in the periods of time when CL < MA. A more detailed tutorial on utilizing this new drawing option to, in effect, provide a "PaintBars" feature for custom indicators can be found here.