Also called Confidence threshold, Entry score

Signal confidence

The weighted entry score a bar must clear before the strategy opens a trade, built from trend and momentum agreement. It says nothing about whether a stock is cheap.

Updated 2026-09-03

Signal confidence is a score out of 170 measuring how strong a trading entry looks at the moment it fires. It is assembled from the individual indicator readings: how far the moving averages have separated, how wide the MACD spread is, whether the trend has strength behind it, and whether the RSI is in a range where the signal has historically held up.

It is a relative measure, not a probability. A score of 140 does not mean a 140-out-of-170 chance of being right. It means this entry looks stronger on the same criteria than one scoring 90, and nothing more than that.

This has nothing to do with valuation confidence, which is a high or low flag on whether a DCF can be trusted. The two are unrelated, they measure different things, and reading a strong trading signal as a trustworthy valuation would be a serious mistake. They share a word and nothing else.

See also

  • Valuation confidence — How far the model will stand behind its own answer. Low means free cash flow has been volatile, the price sits far above what the business generates, or a margin had to be guessed. It is not the strategy signal score.
  • Backtest — Running a set of rules over history to see what they would have done. It shows what did happen, never what will, and it flatters any rule tuned on the same data.
  • EMA — An average of recent prices that weights the latest days most heavily, so it turns faster than a simple average. A fast one crossing above a slow one is the classic trend signal.
  • MACD — The gap between a fast and a slow moving average, plotted against its own average. Widening upward means momentum is building, narrowing means it is fading.
  • ADX — Measures how strong a trend is without saying which way it points. Low readings mean a market going sideways, where trend-following strategies bleed.

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Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.

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