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Hi All
Help me out here guys.
I am trying real hard to understand what we are doing here.
I want to create searches based on Relative Strength comparison, to look for strong sectors and then strong stocks in those sectors.
There are a number of codes out there in the forum but I am trying to get a grip on exactly what is that the inbuilt Relstrength function does.
I want to know the Relative Strength comparison of a stock eg BHP versus an index eg XAO, over a time period of 250 days.
Rate of change of BHP :
In English : the percentage change of the price of BHP from a time 250 days ago.
Mathematically = 100 * (today’s close - close of 250 days ago)/ close of 250 days ago.
In Amibroker: ROC(BHP) = 100 * ((C – Ref(C, -250)) / Ref(C, -250));
Rate of change of XAO :
In English: the percentage change of the value of XAO from a time 250 days ago.
Mathematically = 100 * (today’s value – value of 250 days ago) / value of 250 days ago.
In Amibroker : ROC(XAO) =
Now that I have the Rate of Change of each, is the Relative Strength Comparison the difference between these two:
Relstrength = ROC(BHP) – ROC (XAO)
or the one divided by the other:
Relstrength = ROC(BHP) / ROC(XAO) ?
I am asking this because I have found this formula on the internet to use in the Automatic Analyser as an Exploration:
//relative strength comparison run against XAO or relevant sector.
rsc = ROC(EMA(RelStrength("XAO"), 150), 25);
Filter = rsc > 0;
AddColumn(rsc, "RSC");
In english I think this formula says the 25 period rate of change of the 150 period exponential moving average of the relative strength comparison. Is this correct or there some redundancy in this formula?
To understand this I need to know exactly what it is that Amibroker’s Relstrength function is calculating: any help in plain "Newbie english" would really be greatly appreciated.
regards
chrisb
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