You can make this with raw or cooked chillies. It is usually very hot, as most Javanese prefer to make it with cabe rawit, bird chilli, which I think is the hottest of the chillies. And it is usually made in small quantities – just enough for one meal. Make sure that the shrimp paste has already been grilled or fried. If you don’t want to make it with raw chillies, then boil them first for 2–3 minutes.
Sambal terasi is particularly good as a dip for raw vegetables.