OPEN-SOURCE SCRIPT
RS - Relative Strength Score
Updated
Relative strength (RS) is a measure of a stock's price performance relative to the overall market. It is calculated by dividing the stock's price change over a specified period by the market's price change over the same period. A stock with a high RS has outperformed the market, while a stock with a low RS has underperformed. (Stock can any asset that can be compared to a reference index like as Bitcoin, Altcoins etc ...)
Here are some advantages:
- Provides a measure of a stock's performance relative to a benchmark index or sector, allowing for a more accurate comparison of performance.
- Helps identify stocks with strong price momentum that are likely to continue outperforming the market in the short to medium term.
- Allows investors to identify the strongest performers within a particular sector or industry.
- Provides a quantitative and objective measure of a stock's performance, which can help reduce bias in investment decisions.
- Can be used in conjunction with other technical indicators and chart analysis to identify potentially profitable trades.
- Helps investors make more informed decisions by providing a more comprehensive picture of a stock's performance.
How to use it:
- The indicator can be used in daily and weekly timeframes.
- Check, if the default reference index is suited for your asset (Settings) The default is the combination of S&P500+Nasdaq+Dow Jones. For Crypto, it could be TOTAL (ticker for total stock market), for German stocks it could be DAX.
- Decide (settings), if you want to see the RS based on annual calculation (IBD style) or based only for the last quarter
Color coding:
- Red: Stock is performing worse than index (RS < 0)
- Yellow: Stock get momentum, starting to perform better than index (RS > 0)
- Green: Stock is outperforming the index
- Blue: Stock is a shooting star compared to index
- When RS turns positive and stays there, it could be an indication for an outbreak (maybe into a stage 2)
No financial advise. For education purposes only.
Here are some advantages:
- Provides a measure of a stock's performance relative to a benchmark index or sector, allowing for a more accurate comparison of performance.
- Helps identify stocks with strong price momentum that are likely to continue outperforming the market in the short to medium term.
- Allows investors to identify the strongest performers within a particular sector or industry.
- Provides a quantitative and objective measure of a stock's performance, which can help reduce bias in investment decisions.
- Can be used in conjunction with other technical indicators and chart analysis to identify potentially profitable trades.
- Helps investors make more informed decisions by providing a more comprehensive picture of a stock's performance.
How to use it:
- The indicator can be used in daily and weekly timeframes.
- Check, if the default reference index is suited for your asset (Settings) The default is the combination of S&P500+Nasdaq+Dow Jones. For Crypto, it could be TOTAL (ticker for total stock market), for German stocks it could be DAX.
- Decide (settings), if you want to see the RS based on annual calculation (IBD style) or based only for the last quarter
Color coding:
- Red: Stock is performing worse than index (RS < 0)
- Yellow: Stock get momentum, starting to perform better than index (RS > 0)
- Green: Stock is outperforming the index
- Blue: Stock is a shooting star compared to index
- When RS turns positive and stays there, it could be an indication for an outbreak (maybe into a stage 2)
No financial advise. For education purposes only.
Release Notes
version 2Obsolete
- deleted annual vs quarterly selection, now only annual is being used
- deleted source selection, close is now always been used
New
- Select Relative Strength based on index, i.e. selected reference ticker
- Select Relative Strength based on sector, automatically calculated using sector ETFs
- Table is showing the asset type and sector with the corresponding RS values
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
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.