The idea of the SCTR indicator (StockCharts Technical Rank) comes from John Murphy, a famous technical analyst. The indicator scores stocks according to six key technical indicators in the long, medium and short three cycles, and ranks a group of stocks according to the score , so that strong stocks can be identified.
Like other technical indicators, the SCTR is designed to be used in conjunction with other indicators and analysis methods. SCTR can be used as a filter to remove relatively weak stocks and provide a stock pool for further analysis.
1. Six key technical indicators
long-term indicators
1. The percentage of deviation from the 200-day EMA moving average (30% weight)
2. 125-day rise and fall (30% weight)
Mid-term indicators
3. The percentage of deviation from the 50-day EMA moving average (15% weight)
4. 20-day rise and fall (15% weight)
short-term indicators
5. The 3-day slope of the PPO bar (5% weight)
6. 14-day RSI (5% weighting)
Remarks: For the fifth indicator, I checked some information. Some information is "the 3-day slope of the PPO column divided by 3", and some did not divide by 3. Technical Pie thinks that dividing by 3 does not make sense, so there is no division by 3.
For the above six indicators, five of them should be familiar to everyone, only PPO is relatively unfamiliar, let me introduce it below.
2. PPO indicators
The PPO indicator is similar to the MACD indicator, and it also shows a fast line, a slow line, and a columnar line, and if you don’t look at the coordinates, the shape is similar, and the intersection points are almost the same.
DIF:EMA(C,12)-EMA(CLOSE,26);
DEA:EMA(DIF,9);
MACD:(DIF-DEA)*2,COLORSTICK;
PPO:(EMA(C,12)-EMA(C,26))/EMA(C,26)*100;
SL:EMA(PPO,9);
PH:PPO-SL,COLORSTICK;
It can be found through the formula that the fast line of MACD calculates the difference between the 12-day EMA and the 26-day EMA, and the PPO obtains the ratio by dividing the difference by the 26-day EMA.
Compared with MACD, PPO can solve some problems of MACD. The value of the MACD column is affected by the stock price level, and the value range may vary greatly. For example, the value of the MACD bar of a stock with a few yuan may be plus or minus a few tenths, while the value of the MACD bar of a stock with a few hundred yuan may be plus or minus tens of dollars, so the MACD of different stocks is not comparable. However, the value of the PPO bar is not affected by the stock price level, and the values of the PPO bar of different stocks can be compared even if there are great differences in stock prices.
3. Calculate the score
Scoring formula: Use the six key technical indicators to calculate the scores separately, and finally add up according to the weight. Note that the formula name is saved as "SCORE", and this formula needs to be used for subsequent calculations using the extended data manager.
{long term indicator}
A1:=(C-EMA(C,200))/EMA(C,200)*100; {Percentage of deviation from 200-day EMA}
A2:=(C-REF(C,125))/REF(C,125)*100; {125 day increase and decrease}
{Mid-term indicators}
A3:=(C-EMA(C,50))/EMA(C,50)*100; {Percentage of deviation from 50-day EMA moving average}
A4:=(C-REF(C,20))/REF(C,20)*100; {20-day increase and decrease}
{short-term indicators}
PPO:=(EMA(C,12)-EMA(C,26))/EMA(C,26)*100;
SL:=EMA(PPO,9);
PH:=PPO-SL;
A5:=SLOPE(PH,3)*100;{3-day slope of PPO bar}
LC:=REF(C,1);
A6:=SMA(MAX(C-LC,0),14,1)/SMA(ABS(C-LC),14,1)*100;{14日RSI}
SCORE:A1*0.3+A2*0.3+A3*0.15+A4*0.15+A5*0.05+A6*0.05;{calculate the score according to the weight};
4. Calculate the SCTR ranking
The score of a stock can be obtained through the SCORE formula, but the score is not a percentage system. Some stocks may have a score of 150, and some may have a score of 50, so that it is impossible to intuitively see the position of the stock in the entire market. By expanding the data manager, the 0-1000 normalized order ranking can be realized, and finally the ranking result can be transformed into the range of 0-100 through the formula.
For the specific usage method of the extended data manager, you can refer to the two articles written before, so I won’t go into details here.
Detailed Explanation of Tongdaxin Extended Data Manager
Detailed Explanation of Tongdaxin O'Neil RPS Index Formula
After the calculation of the extended data manager is completed, the SCTR indicator is written to refer to the ranking data after calculation. I am citing data 1 here, so write it as EXTDATA_USER(1,0) when writing the indicator. If the referenced data is 9, then write it as EXTDATA_USER(9,0) when writing the indicator. Note that the formula name is saved as "SCTR", and this formula will be used later.
SCTR:EXTDATA_USER(1,0)/10;
5. Sorting of SCTR indicators
You can view the ranking of the SCTR indicator on the day by sorting historical quotations and indicators. In Tongdaxin software interface, input ".401" and press the Enter key to call up the historical market.Indicator sorting interface.
After calculation, the ranking results are as follows:
Six, SCTR strong stock selection formula
SCTR greater than 80 means that the SCORE score is greater than 80% of the stocks in the market, and you can set the size of SCTR according to your own needs.
SCTR:=EXTDATA_USER(1,0)/10;
XG:SCTR>80;
Pay attention to Technical Pie and learn more knowledge about writing Tongdaxin indicator formulas.
Friendly reminder: This article is only for learning and exchanging technical indicator formulas, and does not constitute any investment advice. Investment is risky, you need to be cautious when entering the market!