Signal confluence
Understand how the app combines five technical signals into a single score, and why that score remains a summary rather than a prediction.
The essentials
The app computes five independent technical signals: RSI, MACD, the EMA50/EMA200 crossover, price versus EMA50, and the Bollinger Bands %B. Each of these signals casts an independent vote: bullish, bearish, or neutral.
These five votes are then combined into a confluence score ranging from -100 to +100. Each signal carries exactly the same weight in the calculation: a bullish vote counts as +1, a bearish vote as -1, a neutral vote as 0, and the sum of the five votes is scaled to the -100 to +100 range. The closer the score is to +100, the more the signals agree on an upward move; the closer to -100, the more they agree on a downward move.
- RSI: oversold or overbought relative to the 30 and 70 thresholds.
- MACD: the MACD line's position relative to its signal line.
- EMA50 vs EMA200: the underlying trend, bullish or bearish.
- Price vs EMA50: a shorter-term bias.
- Bollinger Bands %B: proximity to the lower or upper band.
The value of confluence is that any single indicator can misfire or give an isolated signal that goes nowhere. When several independent signals point in the same direction, the chance that it is mere statistical noise goes down: agreement across multiple measurements reduces the risk of a false signal, even though it never eliminates it entirely.
Going further: contradictory signals
A score close to zero does not mean nothing is happening: it most often means the five signals disagree, some voting bullish and others bearish, so they cancel each other out in the average.
That disagreement is itself useful information. It typically reflects a phase of market indecision, or a market moving sideways in a range rather than trending clearly, where trend indicators and reversal oscillators send opposing messages.
Expert: equal weighting and its limits
Giving all five signals the same weight is a deliberate simplification, chosen for the score's readability and reproducibility rather than to mirror market reality as closely as possible.
In practice, how much an indicator matters depends on the market regime: moving averages and the MACD tend to be more reliable in a strong trend, while RSI and Bollinger %B often give better signals in a ranging market. Equal weighting can therefore dilute a strong, well-suited signal among weaker ones that are less appropriate for the current context.