Reading Signals

OSRS Finance generates four types of trading signals:

• Margin Threshold — Fires when an item's current margin exceeds 5% after tax. Designed for quick flips. Evaluated every 5 minutes against live data.
• Mean Reversion — Fires when an item's z-score exceeds the threshold (typically 2.0–2.5), indicating the price is statistically far from its mean. Best on shop-anchored and cost-anchored items.
• Volume Spike — Fires when trading volume exceeds 2.5 standard deviations above average. Unusual volume often precedes price moves. Checked every 5 minutes.
• Prophet Forecast — A 7-day machine learning prediction using Facebook Prophet. Runs daily. Predicts both direction and magnitude of price change.

Every signal includes a confidence score from 0 to 1, calculated as the geometric mean of three independent factors:

• Consistency — What percentage of recent days showed positive returns? An item profitable 6 out of 7 days scores higher than one profitable 4 out of 7.
• Sharpe Ratio — The margin divided by its standard deviation. High Sharpe means stable, predictable profits. Low Sharpe means volatile — some days great, others terrible.
• Volume Adequacy — Daily volume relative to the item's buy limit. If volume is low relative to your buy limit, you may struggle to fill orders, reducing real GP/hr.

The geometric mean ensures all three factors must be strong. A single weak factor drags the entire score down — you can't have high confidence without adequate volume, even if margins look great.

These are two different measurements that both matter:

• Win Rate is historical — it comes from backtesting. “This strategy on this item was profitable 68% of the time over the past 60 days.” It tells you how the strategy performed in the past.
• Confidence is forward-looking — it reflects current market conditions. “Right now, this item's margin is consistent, the Sharpe is strong, and volume is adequate.” It tells you whether conditions are favorable today.

An item can have a high historical win rate but low current confidence (conditions have deteriorated), or vice versa. The best trades have both: proven track record and favorable current conditions.

Your active trading mode applies a 2x weight boost to relevant signal types when ranking recommendations:

• Quick Flips — Boosts margin threshold and mean reversion signals. Prioritizes items you can flip within minutes to hours.
• Swing Trades — Boosts mean reversion and Prophet forecast signals. Prioritizes multi-day holds where prices are expected to revert.
• Shop Runs — Boosts margin signals for shop-anchored items. Focuses on guaranteed NPC-to-GE arbitrage.
• Long Term — Boosts Prophet forecast signals. Emphasizes 7-day directional predictions.

The boost does not hide other signals — it reranks them so the most relevant ones appear first. You can always see all signals regardless of mode.

Signals are labeled based on their confidence score:

• HIGH (confidence ≥ 0.7) — Strong across all three factors: consistent margins, good Sharpe ratio, and adequate volume. These are the signals worth acting on with conviction.
• MEDIUM (confidence 0.5–0.7) — Adequate but not exceptional. Typically one factor is weaker — maybe volume is borderline, or margins have been inconsistent on a couple of days. Worth considering but with smaller position sizes.
• LOW (confidence < 0.5) — At least one factor is significantly weak. These appear for completeness but are not recommended for active trading without additional research.