Portfolio Boss Documentation

About Filters & Rules



In Portfolio Boss, Technical Indicators are used for selecting which instruments to be entered as Positions; these are known as the “Buy Filters”, and you can find them on the Buy Filters Panel.



As well, Technical Indicators are used to define the criteria for exiting Positions; these are known as the “Sell Filters”, which you can find on the Sell Filters Panel.



And then there are “Ranking Rules”, which are Technical Indicators used for ranking the instruments top to bottom. You can find them on the Ranking Panel.



So first of all, instruments in your strategy's Portfolio must pass the Buy Filters' criteria. Each instrument must fulfill all the Buy Filters listed on the strategy; if just even one Buy Filter is not satisfied, the instrument will not be considered. 



For example, to be considered as a Position, an instrument's latest closing price must be above the 200 days SMA and its volatility of the past 10 days must fall within 30% and 50%.

Now then, there could be quite a few instruments that passed the first screening; more than the maximum number of Positions you'd like to hold at any given time (set on the parameter “Total Positions to Hold”). So, how does the strategy pick the final instruments to be entered as Positions?

Enter the Ranking Rules, which rank the instruments top to bottom, based on certain criteria. For example, the Ranking Rules prefer instruments with the highest gain (profit) during the past 10 days; thus the topmost ranked instrument is the one with the highest gain, while the lowest ranked instrument has the least gain.



Now, let's say the maximum number of Positions you'd like to hold at any given time is 10, then only the top 10 ranked instruments (that have also passed the Buy Filters) will be entered as Positions.



Once the Positions are entered, the strategy watches them like a hawk, whether or not they hit any of the Sell Filters. For a Position to be exited, it only needs to hit one of the Sell Filters. 



For example, there are two Sell Filters: one is when a Position's latest closing price goes below the 200 days SMA, while the other looks at the SPX index, whether or not it closes below the lowest closing-price of the past 6 months.

If a Position closes below its 200 days SMA but the SPX index is still safe (above its lowest close), then the Position will be exited. Alternatively, if all Positions closed above their respective 200 days SMA but the SPX index is going downhill (it closes below the lowest close of the past 6 months), then all Positions will be exited, no exception.


In this Chapter 6, we will discuss all the Filters and Ranking Rules in great detail.

We'll see what Technical Indicators are used, the real-life application of the filters, and the description of each parameter. Keep in mind, these are just the generally accepted wisdom for using these indicators, which means they may not hold true all the time, since Technical Analysis can't predict the future 100%.

So use them not as a bible set in stone, but as a general rule of thumb.





  • Mostly, filters that exist as Buy Filters also exist as Sell Filters. That is, they're using the same Technical Indicators but with different criteria. Therefore to avoid redundancy, we will only discuss each Filter once (both as a Buy and Sell Filter).


  • It's important to note that the various filters & rules in your strategy must be able to cope with a long period (both in the future and in the past), so the strategy can stand the test of time, weathering various market conditions. It's very tempting to set your strategy to perform very well in the near future, but that's a mistake you want to avoid.


  • Even if a Position doesn't hit any Sell Filters, it may be liquidated due to the instrument's company (or fund) getting delisted from the exchanges (merger, acquisition, or pure fat old bankruptcy).


  • As a side note, Sell Filters are also used when entering Positions. That is, if any of the would-be Positions also hits the Sell Filters, then the strategy will discard it, as it's useless to enter the Position only to be exited at the same time.


  • Please note that some Portfolio Boss licenses only allow you to use specific filters, or filters with limited parameters. If you wish to upgrade your license, please contact our Customer Support team at support@portfolioboss.com.




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