Generating Trading Signals

Overview

Multi-indicator signal generation system that analyzes price action using 7 technical indicators and produces composite BUY/SELL signals with confidence scores and risk management levels.

Indicators Used:

• RSI (Relative Strength Index) - Overbought/oversold

• MACD (Moving Average Convergence Divergence) - Trend and momentum

• Bollinger Bands - Mean reversion and volatility

• Trend (SMA 20/50/200 crossovers) - Trend direction

• Volume - Confirmation of moves

• Stochastic Oscillator - Short-term momentum

• ADX (Average Directional Index) - Trend strength

Prerequisites

Install required dependencies:

pip install yfinance pandas numpy

Optional for visualization:

pip install matplotlib

Instructions

Step 1: Quick Signal Scan

Scan multiple assets for trading opportunities:

python {baseDir}/scripts/scanner.py --watchlist crypto_top10 --period 6m

Output shows signal type (STRONG_BUY/BUY/NEUTRAL/SELL/STRONG_SELL) and confidence for each asset.

Step 2: Detailed Signal Analysis

Get full indicator breakdown for a specific symbol:

python {baseDir}/scripts/scanner.py --symbols BTC-USD --detail

Shows each indicator's contribution:

• Individual signal (BUY/SELL/NEUTRAL)

• Indicator value

• Reasoning (e.g., "RSI oversold at 28.5")

Step 3: Filter and Rank Signals

Find the best opportunities:

Only buy signals with 70%+ confidence

python {baseDir}/scripts/scanner.py --filter buy --min-confidence 70 --rank confidence

Rank by most bullish

python {baseDir}/scripts/scanner.py --rank bullish

Save results to JSON

python {baseDir}/scripts/scanner.py --output signals.json

Step 4: Use Custom Watchlists

Available predefined watchlists:

python {baseDir}/scripts/scanner.py --list-watchlists python {baseDir}/scripts/scanner.py --watchlist crypto_defi

Watchlists: crypto_top10 , crypto_defi , crypto_layer2 , stocks_tech , etfs_major

Output

Signal Summary Table

================================================================================ SIGNAL SCANNER RESULTS

Symbol Signal Confidence Price Stop Loss

BTC-USD STRONG_BUY 78.5% $67,234.00 $64,890.00 ETH-USD BUY 62.3% $3,456.00 $3,312.00 SOL-USD NEUTRAL 45.0% $142.50 N/A

Summary: 2 Buy | 1 Neutral | 0 Sell Scanned: 3 assets | [timestamp]

Detailed Signal Output

====================================================================== BTC-USD - STRONG_BUY Confidence: 78.5% | Price: $67,234.00

Risk Management: Stop Loss: $64,890.00 Take Profit: $71,922.00 Risk/Reward: 1:2.0

Signal Components:

RSI              | STRONG_BUY   | Oversold at 28.5 (< 30)
MACD             | BUY          | MACD above signal, positive momentum
Bollinger Bands  | BUY          | Price near lower band (%B = 0.15)
Trend            | BUY          | Uptrend: price above key MAs
Volume           | STRONG_BUY   | High volume (2.3x) on up move
Stochastic       | STRONG_BUY   | Oversold (%K=18.2, %D=21.5)
ADX              | BUY          | Strong uptrend (ADX=32.1)

Signal Types

Signal Score Meaning

STRONG_BUY +2 Multiple strong buy signals aligned

BUY +1 Moderate buy signals

NEUTRAL 0 No clear direction

SELL -1 Moderate sell signals

STRONG_SELL -2 Multiple strong sell signals aligned

Confidence Interpretation

Confidence Interpretation

70-100% High conviction, strong signal

50-70% Moderate conviction

30-50% Weak signal, mixed indicators

0-30% No clear direction, avoid trading

Configuration

Edit {baseDir}/config/settings.yaml :

indicators: rsi: period: 14 overbought: 70 oversold: 30

signals: weights: rsi: 1.0 macd: 1.0 bollinger: 1.0 trend: 1.0 volume: 0.5

Error Handling

See {baseDir}/references/errors.md for common issues:

• API rate limits

• Insufficient data handling

• Network errors

Examples

See {baseDir}/references/examples.md for detailed examples:

• Multi-timeframe analysis

• Custom indicator parameters

• Combining with backtester

• Automated scanning schedules

Integration with Backtester

Test signals historically:

Generate signal

python {baseDir}/scripts/scanner.py --symbols BTC-USD --detail

Backtest the strategy that generated the signal

python {baseDir}/../trading-strategy-backtester/skills/backtesting-trading-strategies/scripts/backtest.py
--strategy rsi_reversal --symbol BTC-USD --period 1y

Files

File Purpose

scripts/scanner.py

Main signal scanner

scripts/signals.py

Signal generation logic

scripts/indicators.py

Technical indicator calculations

config/settings.yaml

Configuration

Resources

• yfinance for price data

• pandas/numpy for calculations

• Compatible with trading-strategy-backtester plugin