Connection to the Engine is done through its “External Indicator” input field at the very bottom of the Engine’s Settings/Inputs.
The Engine must be operating in study mode to be able to connect an external indicator to it.
The way this script builds the signal is straightforward, as you will see in the code. Two aspects are worth mentioning:
The “FudgeStop()” function used to fudge the stop value by one tick for the rare cases where it will match one of the protocol reserved values, i.e. 1, 2 or 3.
The priority and exclusivity given to the different types of signals in the signal-building “Signal = …” line. No two signals can be sent simultaneously through the signal plot, except for the entry and stop combination.
You can determine in this script’s Settings/Inputs the type of signals that will go through the signal plot.
This script respects the following protocol:
EXTERNAL SIGNAL PROTOCOL
Only one external indicator can be connected to a script; in order to leverage its use to the fullest, the engine provides options to use it as either an entry signal, an entry/exit signal or a filter. When used as an entry signal, you can also use the signal to provide the entry’s stop. Here’s how this works:
For filter state: supply +1 for bull (long entries allowed), -1 for bear (short entries allowed).
For entry signals: supply +2 for long, -2 for short.
For exit signals: supply +3 for exit from long, -3 for exit from short.
To send an entry stop level with an entry signal: Send positive stop level for long entry (e.g. 103.33 to enter a long with a stop at 103.33), negative stop level for short entry (e.g. -103.33 to enter a short with a stop at 103.33). If you use this feature, your indicator will have to check for exact stop levels of 1.0, 2.0 or 3.0 and their negative counterparts, and fudge them with a tick in order to avoid confusion with other signals in the protocol.
Remember that mere generation of the values by your indicator will have no effect until you explicitly allow their use in the appropriate sections of the Engine’s Settings/Inputs.
The signal is also connected to the Backtesting-Trading Engine appearing on the chart. The Engine has been configured so that:
1. The entry strat is set to "External indicator", and
2. This indicator's Signal plot has been selected in the Engine's "Connect your indicator here" field at the very bottom of the Engine's Inputs.
Since only the entries are sent to the Engine through the signal in this particular instance, the trades are exited using the Engine's active stop and exit strats.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.
The Engine's focus being on real-world trading and alerts not permitting dynamic alert messages in v3, dynamic information like position size couldn't be sent through alerts. Now that we have dynamic alerts in Pine, perhaps the next version of the Engine could allow an externalization of position sizes and their inclusion in alert messages.
Depending on what you will be wanting to use your indicator's signals for, you will then need to assign values to all or some of the pairs of variables used for filter, entries or exits (which all have boolean values), and stops (float values). For example, if you only use your indicator for entries, then you only need to define the conditions corresponding to the proper states for variables "EnterLong" and "EnterShort". You can then initialize all others to false for booleans and zero for stops.
Once you confirm the signal is plotting when needed, you're ready to connect it to the Engine.