ByteTrend 101
The five rules
The score is the sum of five yes/no tests. Each one that passes adds a point.
The tests
| # | Rule | What it tells you |
|---|---|---|
| 1 | Price is above its long moving average | The big-picture trend is up |
| 2 | Price is above its short moving average | Momentum is building here and now |
| 3 | The long moving average is rising | The underlying trend agrees |
| 4 | The short moving average is rising | The recent trend agrees |
| 5 | The most recent extreme touched was the high, not the low | The security has made new highs more recently than new lows |
Rules 1 and 2 ask whether price is above the averages. Rules 3 and 4 ask whether the averages themselves are rising. Those are different questions: a price can spike above a moving average that is still falling, and that combination scores differently from a trend where both agree.
Rule 5, the one people ask about
Within a rolling window, did the price more recently touch the top of its range or the bottom? Touching the high more recently is trend-confirming.
It’s a deliberately simple way of asking “which way did this last stretch?” without smoothing the answer away, and it is the rule that most often separates a 4 from a 5.
Reading a change, not just a level
A score is more useful in motion than at rest. A move from 2 to 4 says a trend is forming; a slip from 5 to 3 says an established trend is being questioned.
The asset tables show the day’s score change beside each score for exactly this reason, and count consecutive weeks at 5 or at 0 (the W=5 and W=0 columns) so you can tell a trend that has held for a year from one that arrived on Tuesday. The small sparkline in the same row is a year of weekly CAPR — the shape of the performance behind the score, not the score itself.
Order doesn’t affect the score
The rules are numbered in the order the scoring engine checks them, but the score is a count of five booleans — the numbering makes no difference to the result. The exact windows behind each rule are on The ByteTrend score.