Post #1638 by Rabelais on the Mechanical Investing board

Investment Strategies / Mechanical Investing ❤

Unthreaded | Threaded | Whole Thread (35)

Post New | Post Reply | Report Post | Recommend It!

No. of Recommendations: 1

I think BCC is being misconstrued here as representing a scale.
A value of 0 means all signals negative.
A value of 7 means all signals positive.
But in between there is no scale.
The values 1,2, and 4 each mean that one of the indicators is positive and two are negative.
The values 3,5, and 6 each mean that two of the indicators are positive and one is negative.
So values of 1,2, and 4 are effectively equal, unless you decide to rank the three indicators relative to one another.
The same goes for values of 3,5, and 6.

In that case, what was the original intent for assigning weighted values (i.e., 4 for DBE, 2 for NH/NL, 1 for SMA), giving a range of 0 to 7, instead of a value of one for each indicator, giving a range of 0 to 3? It seems to me that weighted values complicate the system if they don't have any meaning.

JRB

Post New | Post Reply | Report Post | Recommend It!

Print the post

Unthreaded | Threaded | Whole Thread (35)

Prev | Next

Announcements

Mechanical Investing FAQ

Contact Shrewd'm
Contact the developer of these message boards.

A community forum supporting civilized, and highly helpful, self-educating investors that come together for Shrewdness and merry spirits. These message boards closely follow the look and feel of the old message boards at boards.fool.com prior to the boards redirected to discussion.fool.com. Shrewd'm is not affiliated with the comprehensive and excellent investment website, The Motley Fool (TMF), in any way. The Shrewd commmunity here has owed, and continues to owe, gratitude to The Motley Fool for nurturing a culture of jovial irreverence towards Wall St, and that tradition will continue here.