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By using the Relative Strength of a security(ies) you can do just that, in
2 ways, either by comparing or by 'performance' ranking.
In Metastock this indicator is build-in as the "Relative Strength Comparison".
You will have to press the Browse button to search/apply for that index or
other security to which you want your base security to compare to
(or to compare with).
Open a security, drag the RS from the Indicator List and on plotting the RS
you will be straight in its Parameter TAB(of the Properties Dialog Window),
then click Browse, apply the Index(eg S&P500) and on the next Color TAB
change its color and Press OK.
(Note that you can apply to have the comparison to start at "0").
This will then get the RS plotted in its own window.
Now, go back to the Indicator List and drag down twice(2x) the Moving Average
indicator, selecting the RS as underlay, and also change their color and apply
for periods to be used 10 and 30 days.
Regards,
Ton Maas
Ms-IRB@xxxxxxxxx
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Relative Strength Comparative
Description
The Relative Strength Comparative indicator compares two securities to show
how the securities are performing relative to each other. (Be careful not to
confuse Comparative Relative Strength with the Relative Strength Index).
Relative Strength Comparative Ratio
The Relative Strength Comparative Ratio is calculated by dividing one security's
prices by a second security's price. The result of this division is the ratio, or
relationship, between the two securities.
-Another way to display the Comparative Relative Strength of two securities, is to
create a composite security using The DownLoader (see Maintaining Your Data
with The DownLoader).
-Another way to display securities Relative Strength towards one of their previous
levels singlely and then results combined and compared ranked to other securities,
eg as a group, is to do a Relative Strength - Exploration.
Interpretation
A Relative Strength Comparative chart compares a security's price with that of
another security.
-When the indicator is moving up, it shows that the security
(the one displayed in the chart) is performing better than the selected security.
-When the indicator is moving sideways, it shows that both securities are
performing the same (i.e., rising and falling by the same percentages).
-When the indicator moves down, it shows that the security is performing worse
than the selected security (i.e., not rising as fast or falling faster).
Stock and mutual fund traders may find it helpful to track the Relative Strength
Comparative between the stocks and funds you are following and an index such as
the NASDAQ Composite or the Dow Industrials. Or you may want to do a comparison
with a closely tied industry group. For example, if you were following Ford,
a Relative Strength Comparative between Ford and the S&P Auto Index would be
helpful to show how Ford is performing relative to the entire auto industry.
Futures Traders may find it helpful to compare futures with the CRB index. Or perhaps
one future with another. For example, Gold and Silver, the Yen and the Pound, Bonds
and the Dollar, etc.
OLE
OLE linking the Relative Strength Comparative indicator values to a spreadsheet
will give you further statistical means.
Tip
When using a composite security to create a Relative Strength Comparitive, the value
is stored in the price fields (rather than the indicator field). This enables you to easily
display indicators of Relative Strength Comparatives.
Parameters
The parameters for the Relative Strength Comparative indicator are shown below.
These parameters are specified at the time the indicator is plotted. You can edit the
parameters of an existing plot by right-clicking on the indicator and choosing Properties
from the shortcut menu.
-Security and Folder.
Click the Browse button to select the security with which to compare the chart's base
security. This is usually a market index like the S&P 500. The chart's base security
is divided by the selected security.
-Normalize To Start At Zero.
Check this box if you want the indicator to be "normalized" to start at zero. This is done
by subtracting the beginning Relative Strength ratio (for the first bar loaded in the chart)
from every subsequent value.
This is helpful for comparing one security's Relative Strength with another's.
=================================================
Relative Strength Comparative - Exploration
Eploration Editor Notes:
{****This exploration requires a selected price or indicator plot in the active chart !!***
If you want to do this RS-Ratio scan versus an Index, then use your Index as the Open chart.
-Open a chart and select(=highlight) the security's Price indicator as the active plot
-Keep this chart Open and click the Explorer button
-Select the Relative Strength Comparative exploration as your scan}
FORMULA:
colA: Close/P
colB: Close
colC: P
Filter: Close/P
You can also scan for possible "Buys" based on the RS-Ratio by using as Filter
Filter: Close/P>0
or
Filter: (Close/P)>0 And RSI(14)>60 And MACD()>Mov(MACD(),9,E)
Results
The development of underlays RS-Ratios output reading values can be seen as:
1. (+) > 0 = possitive development
2. 0 = equal
3. (-) < 0 = negative development
Note however, that a possitive Ratio value used by itself, does not implement
a price to rise or that it is a signal to buy. It should be used in combination with
other analysis techniques and tools.
-When your index(=market) rises stronger, a negative RS-Ratio value will be
given and means the underlay is a weaker, slower rising or declining security
-When your index(=market) declines stronger, a possitive RS-Ratio value will be
given and means the underlay is a stronger, rising or slower declining security
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Performance, 1 Year's - ROC last 250 day period - Exploration
Eploration Editor Notes:
{Relative Strength performance and ranking comparising}
FORMULA:
ROC(C,250,%)
SCAN
in Metastocks' Explorer scan-configure :
colom A formula : C
colom B formula : Ref(C,-250)
colom C formula : ROC(C,250,%)
colom A name= Close
colom B name= C1yr-ago
colom C name= Volatil
Filter : ROC(C,250,%)
SEE ALSO
Above mentioned Scan-configure options
(Explorer's main window choose: OPTIONS / LOAD min. 300 periods)
(Explorer's Editor's main window choose: OPTIONS / most recent date / daily data)
Scan-reports Ranking Ability is done by using SORT-button(or the above mentioned method)
USE ALSO
Copy+Paste : to copy report to Excel or Word(Wordpad)
Print : print to file(Win95-Text-printer/Win95-PowerToys95-HTML-printer) or
plain to paper(Default-printer)
NOTE
-250 is the approx. "Exchange-working" days in a one year time period
-Data errors and folder's "dead" stock will appear as rejects and lowest performers.
-If you had a crash before or did an incomplete programs' shutdown , then anoying
files are beiing put in your sec-folders(4x files) wich have to be deleted first!!!!!!
-Composites held in the to be scanned folders disrupt the reliability of reports' outputs;
and while scanning can cause the program to crash.
=================================================
-----Oorspronkelijk bericht-----
Van: UG <ug@xxxxxxxxxxxx>
Aan: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>; realtraders@xxxxxxxxxxxxxx <realtraders@xxxxxxxxxxxxxx>
Datum: donderdag 22 oktober 1998 17:14
Onderwerp: GEN/MKT: What is this called?
>
>Is there an indicator that measures movement with respect to the market?
>Not Beta; that's volatility. I'm looking for something that would vary
>in value from a negative number to a positive one; a value of 1 would
>indicate the security rises in price when the market rises in price, and
>about the same amount. A value of -2 would indicate the security drops
>in price when the market rises (and vice versa), and about double the
>amount.
>
>Does such an indicator exist?
>
>--
>========================================================================
>If God had meant us to be naked, we would have been born that way
>http://www.unixgeek.com/cgi-bin/motd.pl - PGP email preferred
>
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