Case study – creating custom building block – ROC indicator

In this short case study, I will show you how to create a custom block and then how to use it in a real trading strategy. Possibility of extending StrategyQuant with your custom-building blocks without programming is a unique feature that no other software offers.

Firstly let me explain what the custom block is. Every trading strategy consists of entry filters, entry conditions, exits, different calculations, etc. If you disassemble the trading robot into elementary pieces then you will get building blocks. To say it simply, they are bricks which create trading robots.

Before we proceed to our practical example let me explain which kind of custom blocks we can add.

Condition example:
Entry filter for uptrend: Close > MovingAverage(200)
The output is True/False

Price level example:
MonthlyHighestLevel
The output is price level

Value example:
ROC indicator
The output is a number which we can use for other calculations/conditions.

Creating ROC indicator

The ROC indicator returns the value of the price percentage change during the certain period. If the period is 5 and the price drops by 5% during the last five days then the indicator output is -5. In case of price rise, it would be 5.

ROC formula:

ROC = [(Close – Close n periods ago) / (Close n periods ago)] * 100

Adding the ROC indicator as the custom block:

1. Firstly, we open “Custom block” editor.
   
2. Add new custom block – type value:
   
3. Add custom block parameters
   
4. Define ROC formula in SQ
   
5. Now you can start using ROC custom block in your trading strategies
   

You can also download the ROC custom block here and import it into StrategyQuant.

In the next article, I will show you a practical example of how to use ROC custom block in the trading strategy.