If you take one idea from Lemeister, take this one. The closing line is the benchmark, and beating it is the goal.
What the closing line is
The closing line is the final price before a market closes. By then most information is priced in, so it is the market's most accurate estimate. It is the number to measure yourself against.
What closing line value means
Closing line value, or CLV, is the gap between the price you took and the closing price. If you bet a side at a better price than it closed, you have positive CLV. Over many bets, positive CLV is the clearest sign you are finding real value.
Why results lie in the short run
A good bet can lose and a bad bet can win. Variance hides skill over small samples. CLV cuts through the noise because it measures whether your price was good, not whether the ball went in.
How to use it
Log the price you took and the closing price for every position. Track your average CLV. If it is positive and stable, trust your process through a losing run. If it is negative, the edge is not there yet.
The model exists to help you beat the close. Everything else is downstream of that. See closing line value in the glossary.
