The Diamond strategy is a trading strategy implemented as a class in Python. It follows a backtesting framework and consists of three main functions: populate_indicators(), populate_buy_trend(), and populate_sell_trend(). The populate_indicators() function takes a DataFrame and metadata as input and returns the same DataFrame.
In this strategy, it doesn't modify the DataFrame or add any additional indicators.
The populate_buy_trend() function is responsible for identifying buy signals in the data.
It creates a list of conditions based on specific criteria. In this case, the condition checks if the value of a certain indicator has crossed above another indicator multiplied by a specified factor. If any of the conditions are met, the corresponding rows in the DataFrame are marked with a 'buy' signal. The populate_sell_trend() function is similar to populate_buy_trend() but focuses on identifying sell signals. It creates a list of conditions based on the crossing of two indicators, similar to the buy condition. If any of the conditions are met, the corresponding rows in the DataFrame are marked with a 'sell' signal. Overall, the Diamond strategy aims to generate buy and sell signals based on the crossing of specific indicators. The strategy does not populate any additional indicators and relies on the provided indicators and their parameters for decision-making.