This lesson will cover the following
- Explanation and calculation
- How to interpret this indicator
- Trading signals, generated by the indicator
Described by Tushar Chande in the September 1993 edition of “Stock & Commodities” magazine, the TrendScore indicator makes a quantitative and qualitative determination of the direction and strength of a trend. It does so by comparing the current closing price of a trading instrument with the prior closing prices during the past 20 periods.
The indicator fluctuates between -10 and +10. A reading of +10 implies that a strong bull trend is in progress. A reading of -10 implies that a strong bear trend is in progress. TrendScore readings above zero indicate that a bull trend with varying strength is in progress. TrendScore readings below zero indicate that a bear trend with varying strength is in progress.