Manual or Automatic Indicator

Here's an FAQ-style guide for Dharmesh:

Q: What’s the difference between an “automatic” and a “manual” indicator in QuantConnect?

• Automatic indicators are linked directly to a security. QuantConnect automatically updates the indicator with every new bar of data (like price, volume, etc.).
• Manual indicators are not tied directly to a security. You control when and with what data the indicator is updated.

Q: When should I choose a manual indicator?
Pick a manual indicator when you need full control over the data it receives. Examples include:

1. Custom bar construction:
   • Example: You're trading crypto and want a 3-minute Heikin-Ashi SMA. You build the Heikin-Ashi bars yourself, then manually update the SMA with those bars.
2. Time-filtered inputs:
   • Example: You want RSI only from the opening 30 minutes each day, not the full session. Collect those prices and update the indicator manually.
3. Joined or external data:
   • Example: You want to weight close prices using a sentiment score from external data. You combine them and update your indicator with the weighted price.
4. Advanced strategies:
   • Example: You want an EMA of the spread between two futures contracts (e.g., CL - NG). Calculate the spread each bar and manually update the EMA.

Q: When is an automatic indicator the better choice?
Use automatic indicators for standard technical analysis with typical price/volume data. Key advantages:

• Only one line of code to set up.
• Automatic data feeding, updates, and warming up.
• No extra maintenance - perfect for standard strategies (like moving average crossovers, RSI, etc.).

Q: What are the main advantages of manual indicators?

• Flexibility: Mix any data sources (like fundamentals, alternative data, Greeks, etc.).
• Customization: Implement non-standard rules (like volume-weighted highs, exclude news spikes or outliers).
• Precision: Build exactly the signal you want, no assumptions.

Q: Does manual mean more code?
Yes, you’ll write a few extra lines to fetch or build your data, then call Update. The reward is precise control over what your indicator represents.

Rule of thumb:

• If you want to use raw price/volume bars as-is → use automatic indicators.
• If you need to process/filter/adjust the input first → use manual indicators.

Sources: Manual Indicators - QuantConnect.com, Key Concepts - QuantConnect.com, Automatic Indicators - QuantConnect.com, docs writing algorithms indicators indicator universes, Custom Indicator Algorithm

Manual Indicator would be resource intensive (time and cpu) compare to automatic indicator If I am using 20 or more Indicators ?