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 What's the difference between these two PCF's? Rate this Topic:
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 Posted : Thursday, June 10, 2010 12:42:46 PM
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100 * (C1 - C22) / C22) <= 10 AND 100 * (C1 - C11) / C11) <= 10

vs.

100 * (C1 - MINC22) / MINC22) <= 10 AND 100 * (C1 - MINC11) / MINC11) <= 10

Thanks!
StockGuy
 Posted : Thursday, June 10, 2010 12:44:11 PM

Joined: 9/30/2004
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The first uses the Close 22 and 11 days ago.  The second uses the Minimum Close over the preceding 22 and 11 days.

 Posted : Thursday, June 10, 2010 12:55:24 PM
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So the first PCF starts from the close 22 days ago, whereas the second PCF starts from yesterday going back 22 days or do they both start from yesterday going back 22 days?
 Posted : Thursday, June 10, 2010 1:00:30 PM
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Also is there an advantage of one vs. the other?

How would the meaning change if I joined the two PCF's with OR vs AND?
Bruce_L
 Posted : Thursday, June 10, 2010 1:01:15 PM

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The difference is that C22 is just the Close of 22-Bars Ago (C22 doesn't care what the Close has been since 22-Bars Ago) while MINC22 is the lowest Close over the most recent 22-Bars.

So the formula using C22 actually uses slightly older data than MINC22 since C22 is 22-Bars Ago while MINC22 only looks at the lowest Close from the current Bar through 21-Bars Ago.

-Bruce
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 Posted : Thursday, June 10, 2010 1:11:34 PM
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Stock can have less than 10% growth in last 10 and 21 days but can recover from such correction and be up more than 10% in last 10 and 21 days. As a consequence it will be overextended on 10 and 21 day time frame. To avoid such situation we have additional condition about 10 day and 21 day momentum (The PCF being discussed). Together, the 21 and 10 day conditions ensure we have a stock with less than 10% move in last 20 and 10 days.

Given the above description, which of the PCF's would be best suited for this Bruce?
Bruce_L
 Posted : Thursday, June 10, 2010 1:25:21 PM

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The trainers can't give setting, interpretation or investment advice.

100 * (C1 - C22) / C22) <= 10 AND 100 * (C1 - C11) / C11) <= 10

Basically looks for the Price Percent Change between yesterday and both 22 and 11 Bars Ago to be less than or equal to 10%

While:

100 * (C1 - MINC22) / MINC22) <= 10 AND 100 * (C1 - MINC11) / MINC11) <= 10

Looks for the Price of yesterday to be less than or equal to 10% above the lowest Close during both the last 22 and 11 Bars. You would get the same results using only the first portion of this second version:

100 * (C1 - MINC22) / MINC22) <= 10

-Bruce
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 Posted : Thursday, June 10, 2010 1:29:22 PM
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Thanks!
Bruce_L
 Posted : Thursday, June 10, 2010 1:30:12 PM

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You're welcome. Our pleasure.

-Bruce
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 Posted : Thursday, June 10, 2010 5:53:21 PM
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Hi Bruce,

I had just one more question on this.  Would these two PCF's yield the exact same result:

100 * (C1 - MINC22) / MINC22) <= 10

100 * (C1 - MINC22) / MINC22) <= 10 OR 100 * (C1 - MINC11) / MINC11) <= 10

If  not, how are they different?  Thanks!

Bruce_L
 Posted : Friday, June 11, 2010 7:21:28 AM

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One thing we know about about 100 * (C1 - MINC22) / MINC22) <= 10 and 100 * (C1 - MINC11) / MINC11) <= 10 is that MINC22 will always be less than or equal to MINC11 because the most recent 11 Bars are a part of the most recent 22 Bars. Another thing we know is Price is always positive for real stocks.

This means 100 * (C1 - MINC22) / MINC22) is always greater than or equal to 100 * (C1 - MINC11) / MINC11).

If 100 * (C1 - MINC22) / MINC22) is less than or equal to 10, then 100 * (C1 - MINC11) / MINC11) must also be less than or equal to 10. So if:

100 * (C1 - MINC22) / MINC22) <= 10

Then:

100 * (C1 - MINC22) / MINC22) <= 10 AND 100 * (C1 - MINC11) / MINC11) <= 10

It is possible for 100 * (C1 - MINC11) / MINC11) to be less than or equal to 10 without 100 * (C1 - MINC22) / MINC22) being less than or equal to 10 however. With this in mind, it would appear logical that if:

100 * (C1 - MINC11) / MINC11) <= 10

Then the following must be True:

100 * (C1 - MINC22) / MINC22) <= 10 OR 100 * (C1 - MINC11) / MINC11) <= 10

-Bruce
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bustermu
 Posted : Friday, June 11, 2010 9:38:22 AM
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Stronger statements than those given by Bruce can be made.

If a stock has sufficient data to calculate all of the following PCFs, then:

1.

100 * (C1 - MINC22) / MINC22) <= 10

is equivalent to

100 * (C1 - MINC22) / MINC22) <= 10 AND 100 * (C1 - MINC11) / MINC11) <= 10

2.

100 * (C1 - MINC11) / MINC11) <= 10

is equivalent to

100 * (C1 - MINC22) / MINC22) <= 10 OR 100 * (C1 - MINC11) / MINC11) <= 10

Please notice that if a stock declines more than 9.1% today, it will fail both tests.  It was probably intended that C1 above be C.

Thanks,
Jim Murphy
Bruce_L
 Posted : Friday, June 11, 2010 9:48:33 AM

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QUOTE (bustermu)
Please notice that if a stock declines more than 9.1% today, it will fail both tests.  It was probably intended that C1 above be C.

Another possibility (assuming the formula as given was not intended) would be that MINC22.1 was intended instead of MINC22 and MINC11.1 was intended instead of MINC11.

-Bruce
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