The basic rule
An if-then signal checks a condition and picks a holding:
IF condition is true THEN hold A ELSE hold B
For example: IF the S&P 500 is above its 200-day average THEN hold stocks ELSE hold short-term bonds.
Common conditions
| Type | Example |
|---|---|
| Level | 10-day RSI of SPY is below 30 |
| Compare | Price of QQQ is above its 200-day average |
| Relative | 20-day return of stocks is higher than bonds |
| Fundamental | Forward PEG is below 1.5 |
Decision trees
Rules can nest: the THEN or ELSE branch can itself be another if-then. TQQQ For The Long Term (FTLT) is a well-known example with several levels.
Keeping rules robust
- Fewer branches. Every extra condition is another chance to fit noise.
- Round numbers. A rule that only works at an RSI of exactly 27 is fragile; test 25 and 30 too.
- A reason. Each condition should make economic sense before you test it.
- Unseen data. See Out-of-sample testing.
On this site, Strategies are built around fundamental conditions, with market signals available as context.
Try it Try signals in a Strategy
See also
- Systematic investing What systematic, rules-based investing is, how it removes emotion from decisions, its advantages and pitfalls, and how to build a simple rule-based strategy.
- Signal mining and data snooping What signal mining is, how testing millions of rules produces convincing but false results, and how to tell a real fundamental signal from data-mining luck.
- TQQQ For The Long Term (FTLT) The TQQQ For The Long Term strategy explained: its 200-day regime filter, RSI branches, the research behind it, backtest claims and the risks it carries.
- Overfitting in investing What overfitting is, why strategies tuned to past data fail in live trading, what a large study of community strategies found, and how to measure it.
Last updated September 30, 2026. Education only, not investment advice.