Closing Score utilizes a very simple concept and formula to determine the trader's collective sentiment. The formula (((Close – Low) / (High – Low) * 100)) produces a range that is extracted from the true range of the stock’s activity. The High to the Low within the time frame / bars you have chosen. The final output of the formula produces a finite score, between 0 and 100 that indicates to the trader, what the sentiment of the traders where, at the conclusion of this bar or at the end of the trading day. This is displayed on a graph with 10 horizontal stratifications (shown below) each representing 1/10 of the indicators total range of 100. The final dots utilized to indicate the output of this indicator are then rounded to allow placement within the graphs stratification.
The closer the indicator's outputted signal comes to either extreme, zero or 100, the stronger the correlation is between the closing score and future price movements. 97 to 100 are very strong positive signals. 0 to 3 are very negative signals and both have been validated as statically significant, Three-Sigma-Signals. Additionally, we have added an interior band within the placement of the dots to indicate that their proximity is within 3% of the extreme reading of this indicator. If the is above the 14 day moving average it is indicated by placing a dot within the center of the indicator dots to denote a confirmation of this specific indicators signal. Dots that are both within the statistically relevant, extreme range and the for these bars were above the 14 day moving average produce a bulls-eye.
If you study or use analysis in your trading, you can think of Closing Score as an automatic candle stick analysis tool. Take a look at any pattern and compare the point of the closes in that pattern with its corresponding closing score and you will see a very strong correlation, greater than 95%, between what the Closing Score indicates and what the pattern is indicating.
There is an in-depth explanation of this indicator on our website as well as multiple resources related to understanding trader emotions and sentiment. This indicator was published in the Journal of of Stock and ; June, 2016 by Michael Slattery.
Access this Genie indicator for your Tradingview account, through our web site. (Links Below) This will provide you with additional educational information and reference articles, videos, input and setting options and trading strategies this indicator excels in.