BANK OF INDIAEducation
Relative Strength (Not RSI)
For a serious trader Relative Strength (Not RSI) is a very important component. A careful study of RS will tell you your are on which stage.
There are 4 stages in a stock's life Stage:
Stage 1 - This is the stage of consolidation, usually happens at bottom after a fall.
Stage 2 - This when stock breaks out from Stage 1 and price moves away from stage 1.
Stage 3 - This is again a consolidation phase but this will be at top or after stage 2.
Stage 4 - This is the break down of stage 3 and price falls quickly .
As a Trader we usually enter at Stage 2 to go long or Stage 4 to either book out our stock or to short a stock.
Relative Strength or RS is a stocks performance against bench mark index. This tool is freely available in TV community. Which is a great tool to take or avoid a trade.
In this case RS is in red or falling which means the stock is under performing bench mark index NIFTY500. Now look the chart, stock is in consolidation after a up move. So RS is advising us against any further buy a stock is underperforming even though moved up and rightly so the eventual broken down.
There are 4 stages in a stock's life Stage:
Stage 1 - This is the stage of consolidation, usually happens at bottom after a fall.
Stage 2 - This when stock breaks out from Stage 1 and price moves away from stage 1.
Stage 3 - This is again a consolidation phase but this will be at top or after stage 2.
Stage 4 - This is the break down of stage 3 and price falls quickly .
As a Trader we usually enter at Stage 2 to go long or Stage 4 to either book out our stock or to short a stock.
Relative Strength or RS is a stocks performance against bench mark index. This tool is freely available in TV community. Which is a great tool to take or avoid a trade.
In this case RS is in red or falling which means the stock is under performing bench mark index NIFTY500. Now look the chart, stock is in consolidation after a up move. So RS is advising us against any further buy a stock is underperforming even though moved up and rightly so the eventual broken down.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.