The Full Pipeline
Every algorithmic trading strategy is built from three things. This series teaches all of them.
No matter how complex a professional trading strategy looks from the outside, it always comes back to the same three components. You're going to learn each one from the ground up:
In Module 2, we cover all four types of indicators: technical, fundamental, economic, and alternative data. In Module 3, those signals become conditions and actions. In Module 4, you combine them into a complete strategy. In Module 5, you backtest and optimize it. In Module 6, you deploy it live.
Module 2 Preview
Before strategies, conditions, or actions: there are indicators.
An indicator is the most fundamental building block of a trading strategy. Everything starts here. An indicator is a signal, a piece of information, that can help us make a decision about a stock. Indicators don't tell you what to do. They give you a number. You decide what to do with it.
There are four major categories of indicators, and understanding each one gives you a dramatically different lens on the market:
Back in that Cornell lecture hall, the only data I was watching was a stock's price going down. A technical indicator. A red line. I had no idea why it was falling, and I had no system to tell me. If I had been tracking fundamental indicators — revenue growth, margins, the company's actual financial health — the move would have made far more sense. The price was noise. The fundamentals were the signal.
Watch · What is a Trading Indicator? — The Building Blocks of Algorithmic Trading
Here's the rule that ties them all together: an indicator is any data source that produces a number you can use to make a trading decision. That's it. Whether it's a 50-day moving average or the number of cars in a Walmart parking lot counted by satellite: if it evaluates to a number, it can be an indicator.
Why this matters
Most beginners only use technical indicators. Professional strategies combine all four types. The gap between a 10% return and a 30% return is often in which data you decided to pay attention to.
Check Your Understanding
Two questions before you go to Module 2.
Question 1
What is the core difference between a manual trader and an algorithmic trader?
Question 2
Which of the following is NOT a valid trading indicator: (a) a stock's 50-day moving average, (b) a company's free cash flow, (c) the number of Reddit posts mentioning NVDA, (d) your gut feeling about the market?
The Series
Six modules. One complete framework.
This is Module 1. The next article goes deep on the two most common indicator types, technical and fundamental, and explains why you need both to build a strategy that actually works.
NexusTrade lets you create, backtest, and deploy algorithmic trading strategies. No coding required. Aurora, our AI agent, can help you every step of the way.
Get 3 Months Premium Free — via Public.comOpen a Public.com brokerage account, connect it to NexusTrade, and get 3 months of Premium free. · Or take the full course →
If Reddit posts can be used as indicators, can that same logic also apply to TikTok comment sections for example?
Absolutely! YouTube, ML signals… ANYTHING that can be transformed into a number is an indicator