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How To Read The Blockdesk BTF

A brief description of how to read a BTF (Block Trader Forecast)

All of the tools provided at are derived from the data found below the BTF; Peter's Way's Intelligence Lists (top twenty, etc.) are also based on the same data.

The fundamental aspect of the information is a forecast price range. The location of the price (usually) within that range is called the Range Index. These values are marked with red in the example below.

Everything else is derived from this essential information. Range Indexes of less than zero and greater than 100 can and do occur. They represent a very strong sentiment by Market Makers that the issue in question is either over- or under-valued.

The historical/actuarial findings of how such forecasts made on prior days that were very much like today's Range Index turned out are marked by the blue rectangles.

The profitability figures are based on peter's Time-Efficient Risk Management Discipline (TERMD) strategy of holding a position until the Sell Target (Range Forecast High) is reached, or 63 market Days, whichever comes first.

The Sell Target Potential is the current MM's Predicted Upside Reward, (marked in green) and shows the current expectation (forecast) of the Market Makers.

The %Payoff reports the actuarial performance record-keeping of how profitable the MM's predictions were on prior occurrences like today's Range Index. A comparison of those previous forecast outcomes against the current Sell Target Potential is the Credibility Ratio, marked with yellow.

The Drawdown Exposure shows how much the price dipped on the worst case of those prior occasions and helps you prepare for how far the price might sink after taking a long position before eventually recovering to (hopefully) make the sell target within 63 market days or less. The price frequently continues to drop at first, before reaching the target in less than 63 market days. There is a performance summary referenced at blockdesk in their FAQ page.

So in this example, the Credibility Ratio suggests that the confidence level of this current MM outlook is fairly weak, at .5, whereas something much closer to a value of 1 would suggest more confidence in possibly attaining the current Upside Potential. While this candidate isn't a bust, there is no strong argument for taking a position with such a seemingly overstated upside on this example BTF forecast.

The smaller thumbnail image is an historical distribution (somewhat like a bell curve) of Range Indexes for the available history of up to 5 years. This particular example is less, with 760 Market Days of history. A 28 RI is well near the low end, suggesting it is indeed underpriced. But with the weak Cred. Ratio, I'd look for a better prospect, if available.

This is indeed a complex set of numbers and relationships, but all of them are absolutely necessary to ascertain the worthiness of a given candidate. Even so, nothing, including this exceptionally good information, can replace due diligence. You MUST perform your due diligence right up to the minute of taking an action, since even the MM's can make mistakes.

The question has also been raised as to how the Odds-Weighted Score of column 15 in the Intelligence List is calculated, so here's a picture of the formula:

Odds-Weighted Score formulaA recent useful addition to add user convenience is a TERMD and Odds-Weighted Score Calculator tool using javascript. Users can now easily plug in the above input values for this formula and find the OWS for any BTF.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.