Do you need another signal?
Check what a second measurement actually adds.
The idea
Adding another number does not automatically add useful information.
Before making a rule more complicated, explain what the new measurement tells you that the first one does not.
A small example
Your first signal is the latest price minus a moving average.
Your second signal is that same number multiplied by two.
If the first is positive, the second is positive. If the first is negative, the second is negative. A rule that only checks the sign would make the same decision.
Try it
Compare these pairs:
| First signal | Second signal |
|---|---|
| 1 | 2 |
| −1 | −2 |
| 0 | 0 |
Would the second signal change a rule that asks only “is this above zero?”
Check your answer
No. It repeats the same information for that rule.
Keep our first project simple: one signal and one written rule. Next, you will decide how to test it. The detailed order-book articles remain available as optional reading.