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From P/E, P/B and ROE to confluence, regime and MDD: the terms that appear on the analysis screen, each explained briefly.
Last reviewed: 2026-09-29
Each term gives the definition first, then how to read it. The app's plain-language mode shows the same wording.
P/E (price-to-earnings) divides the share price by earnings per share. A lower number means the stock is cheaper relative to its profits.
It only means something within one industry. High-growth sectors sit structurally higher, while cyclicals look cheapest exactly when earnings peak. For a loss-making company the ratio does not exist, so the value comes out blank or negative.
Strategies using this metric: Contrarian Bargain-Buying Strategy · Contrarian Low-P/E Strategy · Margin-of-Safety Value Strategy · Growth at a Reasonable Price Strategy
P/B (price-to-book) divides the price by net assets per share. Below 1× means the stock trades under the value of the company's net assets.
The denominator is book value, so assets the books understate, such as long-held property or brands, are missing. Asset-heavy manufacturers read low and asset-light software companies read high, which makes comparison across industries weak.
Strategies using this metric: Contrarian Bargain-Buying Strategy · Contrarian Low-P/E Strategy · Margin-of-Safety Value Strategy · Absolute-Return Margin of Safety Strategy
P/S (price-to-sales) divides market cap by annual revenue. Useful for comparing companies whose profits are still small.
Revenue exists even when profit does not, so P/S is the fallback for companies that have yet to turn a profit. But revenue that never becomes profit makes a low P/S meaningless. It reads properly only next to operating margin.
ROE (return on equity) is how much profit was made on shareholders' money in a year. Higher means capital is put to better use.
Equity is the denominator, so taking on debt lifts ROE even when profit is unchanged. Reading it beside debt-to-equity and ROA is what separates a genuinely good business from a leveraged one.
Strategies using this metric: New-High Growth Momentum Strategy · Quality Value Strategy
ROA (return on assets) is how much profit was made on everything the company owns.
The denominator includes borrowed money, so leverage is stripped out. A high ROE paired with a low ROA usually means the gap comes from debt.
The share of revenue kept as operating profit. Higher means the company sells at healthy prices.
It measures the core business, so industry character shows through. Retail sits structurally low, software high. Whether the margin holds across several years says more than any single year's level.
Strategies using this metric: Quality Value Strategy
Debt compared to shareholders' equity. 100% means debt equals equity; lower is safer.
The normal range differs sharply by industry. Banks and utilities sit structurally high, and that alone is not a warning. What actually matters is whether interest stays affordable when profits shrink.
Strategies using this metric: Margin-of-Safety Value Strategy · Quality Value Strategy
Assets convertible to cash within a year versus debts due within a year. Higher means more breathing room.
Below 100% means debts due within a year exceed the assets that can be turned into cash within a year. But an inventory-heavy company only has the breathing room the ratio implies if that inventory actually sells.
Strategies using this metric: Margin-of-Safety Value Strategy · Absolute-Return Margin of Safety Strategy
Yearly dividends as a share of the price. Read it like an interest rate.
The price is the denominator, so a falling price raises the yield even when the dividend is unchanged. An unusually high yield can mean the price collapsed rather than the company improved, so whether the payout is sustainable matters as much as its size.
Strategies using this metric: Contrarian Bargain-Buying Strategy · Contrarian Low-P/E Strategy
PEG divides P/E by earnings growth. Below 1 means the price is low relative to how fast profits grow.
The value swings with where the growth rate comes from. Trailing results and forward estimates are different numbers. When growth is near zero or negative, the division stops meaning anything.
Strategies using this metric: Growth at a Reasonable Price Strategy
If you bought the whole company, the yearly operating profit as a percent of what you paid. Higher means cheaper.
This app divides operating profit (EBIT) by enterprise value (EV). That differs from inverse P/E, which uses net income and market capitalization. It compares operating profit with enterprise value; it is not interest paid out or a guaranteed return.
Strategies using this metric: Quant Quality · Value Strategy
Profit made on the money actually invested in the business. Higher means a better business.
Only the capital actually tied up in the business sits in the denominator, so the test is whether it clears the cost of that capital. Below that line, growing revenue does not build value.
Strategies using this metric: Quant Quality · Value Strategy
Share price times total shares. It is the market's price for the whole company.
Share price alone says nothing about size. With different share counts, a cheaper stock can be the larger company. Issuance or buybacks change the figure even when the price does not move.
Strategies using this metric: Absolute-Return Margin of Safety Strategy · Growth at a Reasonable Price Strategy
A line of average prices over recent days. Price above it means trading higher than the recent norm.
It averages prices that already happened, so it turns after the move does. It is late, but steadier against noise. This tool uses 5, 20, 60 and 120 bars by default and feeds the stacking order and crossovers into the trend-direction part of the confluence score.
Strategies using this metric: Trend Breakout Strategy · New-High Growth Momentum Strategy · Trend Template Strategy
How many shares changed hands. Moves backed by rising volume are more trustworthy.
It points no direction on its own; it decides how much weight the other indicators deserve. The same breakout means more when volume comes with it. This tool treats 1.8x the 20-bar average as a surge and counts up-days against down-days on rising volume separately (accumulation versus distribution).
Strategies using this metric: Trend Breakout Strategy · New-High Growth Momentum Strategy · Trend Template Strategy
Several indicators pointing the same way at once. The overall score measures that overlap.
The Confluence Zone confluence score is a weighted average of nine pure technical indicators, scaled to 1-100, where 50 is neutral. By default, first crossing 70 is logged as bullish and first falling under 30 as bearish, and at least three indicators must agree before either counts. Overlap is not proof. Indicators drawn from the same source (price) can only confirm each other so far.
Strategies using this metric: Trend Breakout Strategy
Where the market or stock sits in its big-picture flow (up / sideways / down).
This tool keeps regime out of the score and runs it as a pass/block gate instead, so a stock never reads 55 points while in a downtrend. It is judged from where price sits against the 200-day average and which way that average slopes, and it is always computed on daily bars even when the chart is set to 4-hour. Changes are confirmed over several bars, so the verdict does not flip daily.
Checking how today's rules would have performed in the past, using historical data.
It applies today's rules to the past, so the result only says how those rules did over that stretch. The more the rules are tuned to fit history, the better history looks and the less it says about the future, which is why drawdown and trade count matter as much as return.
MDD (max drawdown) is the deepest peak-to-trough fall. It is the worst stretch you would have had to sit through.
In practice this number, not the return, is where strategies break. A 40% drawdown you cannot sit through never delivers its average annual return. Reading it beside how long recovery took makes it clearer whether the size is bearable.
CAGR converts multi-year results into a single compounded yearly rate. The "n-year CAGR" on the fundamentals card compares only the first and last annual net income over the actual elapsed years, so an unusual base year swings it a lot and the years in between are invisible. It is a historical rate, so the PEG built on it is historical too.
It flattens several years into one smooth compounded rate, so everything that happened in between disappears. Two paths with the same CAGR but 15% and 50% drawdowns are entirely different experiences to live through. The "n-year CAGR" on the fundamentals card divides only the first and last annual net income by the actual elapsed years, so a base year that was a post-loss trough or a one-off peak inflates or deflates it badly. This app's PEG uses that historical CAGR first, so it differs from a PEG built on forward growth estimates.
RSI gauges recent upward strength on a 0–100 scale. Above 70 reads overheated; below 30, oversold.
This tool uses Wilder's 14-bar calculation. In a strong uptrend it is normal for RSI to stay above 70 for a long time, so high does not mean about to fall, which is why it counts here as one weighted vote (0.4) among nine, never a verdict on its own.
MACD tracks the gap between short and long averages to gauge trend strength.
It is derived from moving averages, so its signals arrive after the turn. In a sideways market crossovers come often and mean less, so this tool counts the crossover (weight 0.6) and the position around the zero line (0.3) separately.
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