Method
EllTec Analysis Risk/Reward Score
One number from 0 to 100 that sums up an analysis: how large the upside to the first profit target is against the downside to the stop or the invalidation, how likely the primary scenario is, where the price stands relative to the entry zone, how high the risk was rated, and whether the macro backdrop and the fundamentals support the view. It is shown at the top of every analysis for subscribers.
The scale
0 to 29
Very unattractive
Very unattractive: little upside, high risk, or the count is invalidated.
30 to 44
Unattractive
Unattractive: the risk outweighs the opportunity at the current price.
45 to 59
Balanced
Balanced: opportunity and risk roughly cancel out, or the price is far from the entry zone.
60 to 74
Attractive
Attractive: the opportunity clearly outweighs the risk.
75 to 100
Very attractive
Very attractive: a large, probable upside against a limited downside, supported by macro and fundamentals.
The six components
| Probability-weighted reward/risk | 30 % | Upside to the first take-profit (or the next target zone) divided by the downside to the stop-loss, the invalidation or the lower end of the entry zone (at least 3 %), weighted with the stated probability of the primary scenario: p × ratio − (1 − p). A result of 0 means a fair bet, positive values an advantage. |
|---|---|---|
| Reward/risk ratio | 10 % | The plain ratio of upside to downside, on a logarithmic scale: 1 : 1 counts 50 points, 2 : 1 counts 75, 4 : 1 counts 100. When an analysis states no probability, this part carries the weight of the first one. |
| Entry timing | 10 % | Inside the entry zone counts 85, below it 70; above the zone the value falls with every percent of distance, because the trading plan would still wait. |
| Risk assessment | 20 % | The risk score of the analysis (1 to 10), turned around: risk score 1 counts 100 points, 10 counts 0. |
| Macro backdrop | 15 % | The automatic macro check of the asset's region from the macro dashboard (−100 to +100), converted to 0 to 100. |
| Fundamentals | 15 % | For stocks the EllTec Analysis Score (−100 to +100), converted to 0 to 100. For other asset classes the weight goes to the other components. |
Rules
- Only the analysis's own levels are used (levels model): nothing is estimated. Missing inputs are left out and the remaining weights are scaled up.
- The current price comes from the daily price check of EllTec Analysis; for futures and some indices it is the last weekly close.
- An invalidated count is capped at 20 points, a count whose target was reached at 40.
- The Risk/Reward Score is recalculated on every visit and therefore moves with the price.
- Long-term Elliott Wave targets can be far away. The Risk/Reward Score says nothing about the time it may take.
Current ranking
Analyses whose Premium part you can read, highest Risk/Reward Score first.
| Analysis | Risk/Reward Score | Reading | Reward/risk | Probability | Entry zone |
|---|---|---|---|---|---|
| Australia All Ordinaries IndexXAO | 66 | Attractive | 1.8 : 1 | – | above |
| South Africa Top 40 IndexJTOPI | 42 | Unattractive | 0.3 : 1 | – | above |
The EllTec Analysis Risk/Reward Score is a mechanical summary of published analyses for orientation. It is not investment advice and no recommendation to buy or sell.