A composite signal score blends several technical indicators, each voting within a bounded range, into one number, for example -5 to +5. The composite exists because single indicators fail in known, different ways; requiring agreement across families of evidence filters out most of each indicator's false positives.
The families answer different questions, which is the point of blending them:
Unbounded indicator readings let one screaming input dominate the blend; bounding each vote and summing to a capped composite forces the score to mean how many independent kinds of evidence agree, not how loud the loudest input is. A +4 on a -5 to +5 scale reads directly: four families of evidence lean bullish. The bounded design also makes scores comparable across stocks and across time, which is what lets a scanner rank a universe by them, the way Optionscanner's signal scan does.
Everything outside price and volume: valuation, news, event dates, and volatility pricing. That is why a signal score is the first screen in a disciplined pipeline rather than the decision: the composite picks the direction of interest, and separate volatility, liquidity, and event gates decide whether any structure is worth building there. A strong signal into overpriced options, or through an earnings date, fails the later screens the composite cannot see.
The families answer different questions, which is the point of blending them:
Unbounded indicator readings let one screaming input dominate the blend; bounding each vote and summing to a capped composite forces the score to mean how many independent kinds of evidence agree, not how loud the loudest input is. A +4 on a -5 to +5 scale reads directly: four families of evidence lean bullish. The bounded design also makes scores comparable across stocks and across time, which is what lets a scanner rank a universe by them, the way Optionscanner's signal scan does.
Everything outside price and volume: valuation, news, event dates, and volatility pricing. That is why a signal score is the first screen in a disciplined pipeline rather than the decision: the composite picks the direction of interest, and separate volatility, liquidity, and event gates decide whether any structure is worth building there. A strong signal into overpriced options, or through an earnings date, fails the later screens the composite cannot see.
More in The measures behind every number: Reading a Price Cone: Expected Moves on a Chart · Portfolio Greeks: Beta-Weighting a Book of Options · Dividends and Options: Pricing and Assignment Effects