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Dan,
This is something that I found:
PCI - An Introduction
The Percentage Chance Indicator (PCI) is a statistically calculated
trading tool with unique characteristics that has been developed
exclusively for Infotec subcribers.
Firstly, the sample size required to calculate the PCI is not fixed
and is dynamically adjusted to market conditions using regression
and standard deviation techniques.
Subsequently, the standard deviation of the sample from its mean,
affected by its measure of skewness and kurtosis, is calculated. A
similar calculation is performed to determine the 95% boundaries of
this data. The resulting data is plotted as an indicator which tends
to estimate the chances of the price moving in one direction or
another.
To provide a workable system of trading, we overlay a weighted
moving average over the PCI, which creates the basis for the buy
(Bid) and sell (Offer) signals displayed on the screen.
How To Trade With PCI
When the value of the PCI is high (i.e. 80% to 90%), it is time to
anticipate entering a position as soon as the signal for Bid or
Offer is generated. Because the Risk-Reward ratio at this moment is
very low, PCI may be used as a timing device for entering new
positions or closing an existing position efficiently.
The Bid or Offer signals must be acted upon at the time they are
generated. It is also recommended that the new positions are only
entered when the PCI value is high (i.e. 80% to 90%).
Profit expectation, when trading with PCI, must be limited to the
range and volatility of the market. When the price range on the
chart is narrow, profit potential after the deduction of spreads and
commissions becomes limited and trading under such market conditions
should take place after viewing a longer term chart.
PCI on Various Timescales
The value of PCI and its direction may be different on graphs of
different time intervals. As a general rule, a signal on an annual
chart may become profitable after several days where the result of
the signal on a tick chart may be reached in a matter of minutes.
If you are confronted with a Bid signal on a weekly graph, and an
Offer signal on a daily chart, it simply means that there is high
chance that the price will go lower in the next few hours, followed
by a longer term rally.
PCI versus Trend
When the PCI value is changing faster than the price, the prevailing
trend will continue. It can be observed that, if a price level is
more or less maintained, the value of the PCI approaches 50%.
Therefore, if a position is entered in anticipation of a trend
reversal and the PCI value continues to decrease rapidly without a
comparitive change in the price level, the position must be
liquidated. This will not normally result in a loss on the original
poisition.
In general, PCI on short term charts must be used for position
keeping along the prevailing market trend. Signals against the
prevailing trend must be used for profit taking purposes.
---------------- -----------------
There is no way to tell what is being used and anything would be a
guess. Just looking at the PDF that you uploaded and reading the
above I'm seeing standard deviation lines on a normalized indicator.
Again, no way to tell what they are using. Sorry.
Preston
--- In equismetastock@xxxxxxxxxxxxxxx, "skawinski_dan"
<skawinski_dan@xxx> wrote:
>
> Has anyone heard of the PCI, Percentage Chance Indicator?
>
> I came across a .pdf file which gave a description, but I cannot
find
> any other information as I searched the Internet. I think that
there
> was a software company named Infotech which developed it. I have
> posted this document to the Files section.
>
> Thanks.
>
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