For every stock listed on the NYSE, it must add up the last 50 closing prices, divide the result by 50, and then compare that result to the current closing price. If the results is above that closing price, the particular stock is added to the results of the scan. If not, the stock is ignored. The computer then repeats the process for the next NYSE stock. Scans with complex technical formulas, complex filter criteria, and very large source populations can take a very long time to run.
Selectivity refers to the number of stocks that a scan returns.
On the other hand, loosely selective scans often return more than 10 percent of the original population. Useful scans tend to be fairly selective, but will rarely return an empty result list. Scans are designed to find stocks that are in a specific technical situation. If a scan is supposed to return stocks that have recently made strong upward moves, but most of the stocks it returns have not done so, then the scan should probably be refined until it is more accurate. Scans are designed with a particular investing philosophy in mind.