Portfolio Boss Documentation

Primitive Pattern Filter

 

 

This filter looks at an instrument's high, low, closing, or opening price a certain days/months ago, and if that price is higher/lower than the high, low, closing, or opening price of today (or a few days ago), then consider the instrument as a buy/sell.

The price used here is the adjusted price (after dividends, stock splits, or new shares are adjusted), not the actual price it was trading. Aside from prices, it can also compare the instrument's volume x days ago versus y days ago.


It's quite a simple filter, unlike most Technical Indicators, but it has many uses.

For example, as you know during an uptrend newer prices tend to be higher than the older prices, so only buy the instrument if its closing-price 200 days ago is less than the closing-price 0 day ago (“0 day” means the “latest” closing-price).

Or the reverse, if you're Short Selling, only buy instruments whose closing-price 200 days ago is greater than the closing-price 0 day ago.

 


Another example, if you're looking for a “price gap” upward that confirms an uptrend: look for instruments whose high-price 1 day ago is lower than the low-price 0 day ago.

Or the reverse, when you're looking for a “price gap” downward in short selling: look for instruments whose low-price 1 day ago is higher than the high-price 0 day ago.

 

 

Settings for finding the price gap:

 


Now, regarding volume, it can be useful to predict liquidity. So, for example only buy instruments whose volume is increasing from the past 200 days' volume, thus avoiding slippage and making sure your orders are timely filled.

Also, increase in volume may confirm a trend change, as many traders (including big institutional investors) are scrambling to sell (or buy) the shares.

 


 

1.  The first parameter defines the instrument's older property to look for. It can be any one of the “Close”, “Open”, “High”, and “Low” prices, or it can be the “Volume” of that instrument.

 

 



2.  The second parameter defines how long ago that older price (or volume) is taken from.

 

 



3.  The third parameter defines whether the older price (or volume) must be “Greater than” or “Less than” the newer price (or volume).

 

 



4.  The fourth parameter defines the newer property to look for, whether the price (Close, Open, High, Low) or volume.

 

 



5.  The fifth parameter defines how long ago to look for that newer price (or volume). Usually you want to set this parameter at “0 day”, so that you have a fresh signal that is still applicable.

 

 


 

Note:

 


Once this filter is applied, an indicator appears below the Price Chart (at the Instrument Tab) depending on the settings you set for this filter. 

 

 

This indicator is calculated by subtracting the newer value from the older value, so you may see this indicator going in the negative values as well. If the indicator is positive it means the older value is greater than the newer value, whereas negative means the newer value is greater than the older value.

 

 

 

 

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