Your First BloodHound System

You don’t need to be a programmer, or to have built trading logic before, to use BloodHound. This page builds one small, complete system in about 15 minutes, explaining each piece as you need it.

The idea

Most trading ideas are a few plain sentences joined with “and”. Ours is:

To build it, we turn each part into something BloodHound can measure:

In plain words	Measured as	Built with
The trend is up (or down)	The 14-bar SMA is above (or below) the 50-bar SMA	Comparison solver
Not already overbought (or oversold)	The RSI is below 70 (or above 30)	Threshold solver
… and …	Both must be true at once	AND node

That’s the whole system:

Comparison: SMA 14 vs SMA 50 + Threshold: RSI → AND → Result → Signals on the chart

This is an example to learn with, not a recommended way to trade. Once it works, change it to match your own ideas.

Step 1: Open BloodHound

Add BloodHound to a NinjaTrader chart from the Indicators window. The Add BloodHound to a chart video shows how. BloodHound gets its own panel below the chart, and a button at the top of the chart, which shows <empty template> until you save a system. Click it to open the BloodHound window.

In the BloodHound window, click the Logic tab. If the Logic Board has no tab along its top, click New Logic to start a Logic Template: one complete system. You’ll see the Result node: whatever you connect to it is what BloodHound shows on the chart.

Step 2: Check the trend

Click Solvers in the menu and choose Comparison. A Comparison solver node appears on the Logic Board. It compares two things, called Input A and Input B.

With the new node selected, its settings are in the Property Inspector on the right. Input A is already an SMA 14. Change Input B to an SMA with a period of 50.

That’s all. Its standard rules already do what we want: the Long output is on while the SMA 14 is above the SMA 50, and the Short output is on while it’s below.

Here it’s connected straight to Result for a moment, so you can see its output on the chart while you set it up. That’s a handy habit with any new solver.

Step 3: Check it isn’t overbought or oversold

Click Solvers again and choose Threshold. It compares one indicator with a level you choose.

In the Property Inspector, set its Indicator to RSI (its RSI plot). Then click the … button next to Threshold Rules to open the Rules window, and set:

• the Long rule to RSI < 70 (below 70: not overbought), and
• the Short rule to RSI > 30 (above 30: not oversold).

The Long output and the Short output are worked out separately, so both can be on at once. With the RSI at 50, both are on; that’s expected, because this solver only rules trades out. The trend solver decides the direction.

More about the Rules window

Each rule is a sentence you build from menus. See Threshold Rules.

Step 4: Join them with AND

Click Logic in the menu and choose AND. Now connect the nodes: drag from the dot on the right of each solver to the left of the AND node, then from the AND node’s right dot to the Result node.

The AND node’s Long output is on only when both solvers’ Long outputs are on, and the same for Short. That’s the “and” in our idea.

The AND node always shows one more input than you’ve connected, ready for another condition.

Connection made by mistake?

Hover over the connection and click the red ✖ that appears. See Connecting nodes.

Step 5: See the signals

The chart updates as you build. The chart’s background is shaded, with racing stripes:

• Green on bars where the Long side is a signal: trend up and RSI below 70.
• Red where the Short side is a signal: trend down and RSI above 30.
• No color where either condition fails. Around 8:00 and 9:35 below, the RSI dipped to 30, so the Short side stopped even though the trend was down.

In BloodHound’s panel at the bottom, the two outputs are plotted: Long from 0 up to 1, Short from 0 down to -1. A value counts as a signal at 0.8 or more, which is why each solver’s output is 1 when its rule is true. See when a value is a signal.

To keep your system, click Save As on the Main tab and give it a name.

Step 6: From zones to entry signals

Notice the colors cover long stretches of bars. The Comparison solver describes a state: “the trend is up” stays true bar after bar. That’s ideal for a filter, but if you want one signal at the moment to enter, you need an event: “the trend has just turned up”.

A Crossover solver gives exactly that. It has the same two inputs as Comparison, but its output is on only on the bar where Input A crosses Input B.

1. Click Solvers and choose Crossover.
2. Set Input A to SMA 14 and Input B to SMA 50, as before.
3. Delete the Comparison solver’s connection to the AND node, and connect the Crossover solver in its place.

Now the chart shows a single stripe where the SMA 14 crosses the SMA 50, and only when the RSI agrees. Fewer, more distinct signals: a Long on the bar the trend turns up (if not overbought), and a Short on the bar it turns down (if not oversold).

The circled cross gives no signal: the SMA 14 crossed below the SMA 50, but the RSI was down at 30, already oversold. That’s the RSI filter doing its job.

A signal that lasts a few bars

The Crossover solver’s Lookback Period keeps its output on for a few bars after the cross, so the RSI has a little time to agree. See Crossover settings.

Make it yours

Now try changing one thing at a time, and watch the chart after each change:

Try this	What it teaches
Change the SMA periods, or the RSI levels	Every setting is just a value: change it and the signals change with it.
Replace AND with OR	OR needs only one condition. Watch how many more stripes appear.
Add a Time Session solver to the AND node	Only allow signals during the hours you trade.
Use another timeframe for the trend	Take the trend from a bigger chart.

Where to go next

• How BloodHound Works: the ideas behind solvers, logic and confidence values.
• Solvers: every condition BloodHound can check, each with examples.
• Logic Nodes and Function Nodes: more ways to combine conditions.
• BloodHound Interface: a tour of the whole window.
• Weekly workshops: bring your own idea and build it with us live.