Reading Opportunity Scores
Educational Content: This documentation explains how to interpret quantitative analysis and historical patterns. It is not investment advice or a recommendation to buy or sell any security. All trading involves risk. Past performance does not guarantee future results.
Understanding the Metrics
Opportunity Score (0-100) measures pattern strength based on historical data.
Confidence (0-100) indicates how many times the pattern has been observed.
Higher scores and confidence reflect stronger historical patterns.
Think of it like a weather forecast: a score of 85 is like "90% chance of rain" - it's based on historical patterns, not guarantees.
Overall Score: 0-100
The Overall Score is a single number that answers one question: "How strong is this trading opportunity right now?"
Score Ranges (What They Mean)
70-100: Very Strong
What this means: Multiple strong historical patterns align. These setups show the most consistent historical relationships.
50-70: Strong
What this means: Clear historical patterns present. Review the underlying drivers to understand what's creating the signal.
30-50: Moderate
What this means: Some historical patterns present, but signals are mixed or weaker. Requires deeper analysis.
Below 30: Weak
What this means: Historical patterns are weak or conflicting. Insufficient historical evidence for meaningful analysis.
What Goes Into the Score?
The score aggregates all active drivers for that stock right now:
- Signal strength (correlation r-values)
- Pattern reliability (sample size n)
- Direction alignment (are drivers agreeing or conflicting?)
- Current market conditions (volatility, sector trends)
Confidence Score: How Well-Tested?
Confidence tells you how thoroughly we've tested this pattern. Think of it as the "sample size quality check."
A score of 85 backed by 200 tests (high confidence) is far more reliable than a score of 85 backed by 35 tests (lower confidence).
High Confidence (60-100)
Translation: This pattern has been verified 100+ times across many stocks and market conditions. Start here when learning the system.
Lower Confidence (30-60)
Translation: Pattern has 30-100 examples. Could be emerging signal or sector-specific.
Why Confidence Matters
Sample Size Protection A score of 85 backed by 200 tests (high confidence) is far more reliable than a score of 85 backed by 35 tests (lower confidence).
Robustness Across Markets High confidence means the pattern has worked in bull markets, bear markets, high volatility, and low volatility. It's battle-tested.
Avoid False Positives Low confidence patterns might be real... or they might be statistical noise. High confidence filters out the noise.
Direction: Bullish, Bearish, or Neutral
Direction tells you which way the opportunity leans based on all active drivers.
Bullish
What this indicates: Historical patterns suggest upward price movement correlation. Most active drivers show positive relationships with forward returns in the analyzed timeframe.
Bearish
What this indicates: Historical patterns suggest downward price movement correlation. Most active drivers show negative relationships with forward returns in the analyzed timeframe.
Neutral
What this indicates: Drivers show mixed signals or rangebound historical patterns. No clear directional bias in the historical data for this setup.
The Power Combo: Score + Confidence
| Score | Confidence | Quality | Action |
|---|---|---|---|
| 70+ | 60+ | 🔥 Best | Prioritize - highest quality setups |
| 50-70 | 60+ | 👍 Good | Solid - well-tested moderate strength |
| 70+ | 30-60 | ⚠️ Caution | High score, lower confidence - verify drivers |
| 30-50 | 30-60 | ⏸️ Skip | Weak setup - not worth the risk |
Real Example: Evaluating an Opportunity
NVDA (NVIDIA Corporation)
- Overall Score: 78
- Confidence: 72
- Direction: Bullish
Step-by-Step Evaluation:
1. Check the Score 78 = "Very Strong" range. This is a high-quality setup worth investigating.
2. Check the Confidence 72 = "High Confidence" range. This pattern has been validated across many tests.
3. Check the Direction Bullish = Look for long entries, calls, or bull spreads.
4. Conclusion
This is a "Best" quality opportunity. High score (78), high confidence (72), clear direction (bullish). Click into the detail panel to review the top drivers and see what's creating this signal.
Common Questions
Q: What's a "good" score?
A: Focus on 70+ for strong opportunities. But always check confidence too - a score of 75 with confidence 65 is better than a score of 85 with confidence 35.
Q: Can scores change during the day?
A: Yes. Scores update as new data arrives (insider filings, price action, etc.). Check morning and afternoon for changes.
Q: Should I only trade 70+ scores?
A: Not necessarily. It depends on your strategy. Conservative traders stick to 70+/60+ combos. Aggressive traders might act on 50+ scores if other factors align. What matters is understanding what you're trading.
Try It Yourself
Ready to see these concepts in action? Open the Opportunities Dashboard and filter for scores 70+ with confidence 60+. Review 3-5 opportunities and practice evaluating them using this guide.
Next Steps
Now that you know how to read scores, learn about Understanding Drivers to see what creates these opportunities.