This filter looks at an index's last closing value, and if it falls within the specified threshold value, your strategy is allowed to enter or exit Positions. This is a simple filter to look at the market condition (provided your Portfolio is related to the index).
For example, you’re looking at market’s volatility using VIX (an index that calculates the volatility of the S&P 500).
If VIX goes above 30, which indicates a highly volatile market, then exit out of all Positions, and vice versa: when VIX goes below 20 it indicates a generally stable market so your strategy is allowed to enter Positions.
1. The first parameter defines what index to use, which is related in some ways to your Portfolio.
2. The second parameter defines whether the index must be “Greater than”, “Less than”, “Between”, or “Not between” the threshold value(s).
“Not between” might be good if you're Short Selling, that is, you'll only trade if the market is either very low, or very high (over exhausted) thus you're looking for downtrending market.
3. The third parameter defines the threshold value for the index. A negative value is not allowed here, since an index value can’t be negative.