Condition types

Also seen as: dual thresholds, hysteresis band (the two-threshold behaviour of a Single series condition); Double series (the label used in the Custom starting-shape list).

What are the two condition types?

The two types differ only in what the watched series is measured against.

A Double series condition has no numeric thresholds at all: the comparison between the two series is the condition. Switching type in the builder swaps those fields in and out and keeps everything else you had set.

How does each condition type compare?

Both types run one comparison per reading of the watched series.

where: $s_t$ is the value the chosen Indicator produces from the watched series at time $t$; $\square$ is the Operator — "is greater than" or "is less than"; $\theta$ is a threshold you type, meaning $\theta_{\text{off}}$ on the Risk-Off row and $\theta_{\text{on}}$ on the Risk-On row; and $s^{(1)}_t$, $s^{(2)}_t$ are the two series' indicator readings, each configured independently.

Why does a Single series condition have two thresholds instead of one?

Because one line would make the strategy flip every time the series wobbled across it. With a single threshold, a series hovering right at that level crosses it repeatedly, and each crossing would swap the whole allocation profile — a lot of turnover for no lasting change in conditions, which is whipsaw. Two thresholds separate the point where Risk-Off is requested from the point where Risk-On is requested, leaving a band between them where neither test is satisfied and nothing is asked for.

That asymmetry is the point: because the return threshold sits on the far side of the entry threshold, the series has to travel a real distance back before the strategy is asked to return to Risk-On, rather than merely re-crossing the same line. Engineers call this hysteresis — the state depends on which threshold was crossed last, not on a single value. Fincanva exposes both thresholds and both operators; how the engine resolves a reading that sits inside the band is internal. The confirmation delay works on the same problem from the other direction: it adds patience in time, where the two thresholds add distance in value.

What do Indicator and Period set?

The Indicator sets how the series is transformed before the comparison, and the Period field next to it sets how many periods that transformation covers. The four options are Raw price, Simple moving average, Percent change, and Average momentum. In a Double series condition each side has its own Indicator, which is how a series is compared with a transformed version of itself.

Defaults in Fincanva

• Thresholds accept values from −1000 to 1000; outside that the app reports "Risk threshold must be between -1000 and 1000."
• A threshold is read in the same units as the indicator produces — an index level for a raw index, a percentage for a percent change, percentage points for a yield spread.
• The Operator dropdown offers "is greater than" and "is less than". Some built-in risk templates arrive with a crossing comparison instead, stated in the template's own description — the S&P 500 one reads "Risk-Off when the S&P 500 crosses below its 200-day simple moving average." A crossing comparison reads the moment one series crosses the other, not simply sitting above or below it.
• Fincanva does not publish each indicator's formula or its shipped default window — those are engine internals.
• Fincanva does not suggest a threshold value, a series to watch, or a condition type to pick. See Is this financial advice?.

Worked example

Take a Single series condition on a market index you choose, with the Indicator set to "Percent change" and a Period of 6, so the condition reads the index's change over six periods. On the Risk-Off row you set the operator to "is less than" and the value to −5; on the Risk-On row, "is greater than" and 2.

Risk-Off is now requested when the six-period change drops below −5%, and Risk-On is requested only once it has climbed back above +2%. A reading of −1% satisfies neither test, so an index that fell 6% and then recovered to −1% is not yet asked back into Risk-On — it has to clear +2% first. Had you set both thresholds to 0 instead, an index oscillating around flat would ask for a switch at every crossing. The −5 and +2 here are illustrative numbers that show the asymmetry; they are not a suggested setting.

Learn more: Risk conditions