UK Stocks and ETFs - Watchlist and Discussion - Page

RE: UK Stocks - Watchlist and Discussion

(2014-02-16, 03:13 PM)malaguti Wrote: I was referring to page 110 "where the Mansfield chart plots relative strength; they use a complex (proprietary page 109) weighted formula". It does say the results are the same, but in some cases they could be a little different as I mentioned. Either way, I guess its taking things to an extreme for me to be that precise. I want the RS to be showing more strength, and for anglo american, it needs more. If all other factors were good as he says..

As for the RS against which market, he mentions the DJI on the majority of occasions but I just put that down to the stocks he was demonstrating..he also mentions it could have been the S&P in one example so I honestly interpreted that as the market to which that instrument is in. Unfortunately when he mentions apple, he doesn't specifically mention what his relative is..I just would have assumed the nasdaq.

However it dispels doubt to use a single reference such as the S&P..I can certainly understand that, but gives a slightly different bias as in the case of Anglo.
we start with a market for bias towards a direction, then use an RS of a different market. Anyway look, I'm not trying to argue Angel
I'll see if I can replicate his historical charts which may be difficult given the number of years back and see if I can understand more and let you know if anything crops up.
apologies to go off on a tangent..lets see how Anglo gets on anyway, whatever its relative performance is Big Grin

That's interesting, the calculation is clearly one of those grey areas that we may never know the exact answer to, but is worth looking into. But whether weighted or simple it will only be slightly different, so I'm happy to stick to the simple MA for consistency as has worked well over the years.

It will be interesting to see what you find. So good luck with the research. And I can see your point about starting with a bias towards market direction and then using the RS of a different market, but I still think that a universal relative strength reading is more useful as you might have the strongest stock in the FTSE, but it could still be a weak stock compared to other markets and so wouldn't be a good pick as there are "opportunity costs" to consider as he talks about on page 97. So my preference is for a universal reading, but as I said previously it's perfectly acceptable to compare the specific market if you prefer that, and you can even compare to multiple markets and change the sensitivity of the zero line to be faster if you are a trader. For example one member compares to the FTSE100 and uses a 50 day MA for his RS zero line I've noticed. So it's up to you what you decide to use. Smile

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.
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