Hi Bruce,

I am trying to create a scan condition for Bollinger Band Squeeze.  I was looking through some old posts and came accross one that you had written with some suggetions (see below).  My question is, what is the purpose of the second step where you say to "click on the Custom PCF % True Indicator and select Create Scan Condition | Greater Than: 99.9"?  Couldn't you just use the PCF as is?  How would the second step change the results?  If left it as is (just the PCF), is it just looking for a Bollinger Band Squeeze over a 20 day period with the width of the bands getting narrower with each day?  And the purpose of step two is just to specify a certain number of days (number of bars you wish to test) for example 10 days, as opposed to 20 days if the PCF is left as is?  Still don't get the Greater Than: 99.9 part either.

Another possibility is that you want the Bollinger Bands to be decreasing in width for at least a certain number of bars. We can do this by creating a Condition Formula for the 20-Period Simple Bollinger Bands to be decreasing in width from one bar to the next:

ABS(C ^ 2 + C1 ^ 2 + C2 ^ 2 + C3 ^ 2 + C4 ^ 2 + C5 ^ 2 + C6 ^ 2 + C7 ^ 2 + C8 ^ 2 + C9 ^ 2 + C10 ^ 2 + C11 ^ 2 + C12 ^ 2 + C13 ^ 2 + C14 ^ 2 + C15 ^ 2 + C16 ^ 2 + C17 ^ 2 + C18 ^ 2 + C19 ^ 2 - 20 * AVGC20 ^ 2) < ABS(C1 ^ 2 + C2 ^ 2 + C3 ^ 2 + C4 ^ 2 + C5 ^ 2 + C6 ^ 2 + C7 ^ 2 + C8 ^ 2 + C9 ^ 2 + C10 ^ 2 + C11 ^ 2 + C12 ^ 2 + C13 ^ 2 + C14 ^ 2 + C15 ^ 2 + C16 ^ 2 + C17 ^ 2 + C18 ^ 2 + C19 ^ 2 + C20 ^ 2 - 20 * AVGC20.1 ^ 2)

And then using it as the Boolean Indicator in a Custom PCF % True with the Period set to the number of bars over which you wish to test and the Average Type set to Simple. You would then click on the Custom PCF % True Indicator and select Create Scan Condition | Greater Than: 99.9.

The formula itself only checks for 1 bar.

The second step is to check for something happening X bars in a row. It uses a Custom PCF % True Indicator for this. The formula on its own would not do that.

A Custom PCF % True Indicator returns 100% when true and 0% when false.

So if you set the Average Type to Simple and the Period to X, the Custom PCF % True Indicator will only equal 100% if the Custom PCF % True Indicator was equal to all of the most recent X bars.

Clicking on it and checking for the value to be greater than 99.99% will make sure it is equal to 100%.

Thank you Bruce.  So if I set it to 10 bars, it would show me stocks with bollinger bands that are decreasing in width with each subsequent day for a 10 day period?   But it doesn't specify how close the bollinger bands are from the center line ie 4%, it just says that they are decreasing with each day for the amount of days (bars) I specify?

Yes, exactly.

Thanks so much Bruce!

You're welcome.