Subject: Re: Long time reader, infrequent poster
Jim: "price / (52 week high + 52 week low) top N"
me: "I don't get the logic of this screen."


I have been mulling this over trying to figure why this makes sense.
Because gtr1 _does_ say it works.

The formula definitely does not contain price to H52 or price to L52.

Finally I think I get it. It is a form of Relative Strength.
Mathematical formula simplification.

Consider the forumla "P/ ((H+L)/2)"
Read as "P divided by the midpoint (or average) of H and L"
Simplified: "2P/(H+L)"
Compute that for each candidate stock and rank them in descending order.

Multiplying by a constant does not change the ranking, so you can drop the 2.
The formula is now "P/(H+L)"

Read this as: "rank the stocks by how far the current price is above the midpoint (average) of its 52 week high and low".

Normal relative strength is "how far the current price is above some price in the past."
This replaces the single historical price with a function of the historical price range.

Now it makes sense to me.

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I doubt that a lag of a few days on the 52 week measurements make much difference. It is unlikely that a new high or low occurred within 5 days of either end of a 252 day range.

10 HTD 15 is almost the same as just 10, but with half the turnover.