Cumulative Percent Winners
Cumulative percent winners are used to determine if prices have moved from the downside to the upside or from the upside to the downside.
For each sell date of a price series the cumulative percent winners are computed using the following procedure:
1. Compute the cumulative number of the winning (profitable) buy and sell combinations. All buy and sell combinations are stored in the Buy and Sell Return Table.
2. Compute the cumulative number of all buy and sell combinations (winners plus losers).
3. Divide the cumulative number of winners by the cumulative number of buy and sell combinations.
This ratio is called the cumulative percent winners.
For example, suppose the first buy and sell combination is a loser. After one trade the cumulative number of winners is zero, the running total number of trades is one and the cumulative percent winners is 0%. Suppose trade 2 was a winner. After two trades the running total number of winners is one, the running total number of trades is two and the cumulative percent winners is 50%. Suppose after 20 trades the running total number of winners is five, the running total number of trades is 20 so the cumulative percent winners 25%.