ERS Formula

Traderji,

How is the External Relative Strength calculated? Could you give me formula? Also a brief explanation how it is used in picking stocks?

Regards,

Raja Krsnan

Hi friend,
Relative strength, RS is a solid indicator.
It tells you how particular two or three stocks are outperforming the rest of stocks in the industry. If you know infosys is 80% better performing than rest of software stocks,you would naturally invest in it at all best opportune times.

And nobody gives it free.

http://www.tradingpicks.com/futures_newsletter.htm

These people do the research and they can give it to you at nominal cost.

However there is a way out.hardway,of course

go to finance and start comparing price performance between two stocks,
and performance of a stock with respect to nifty or sensex.
keep infy constant and go comparing with every other stock.
make your evaluation at the end.
tedious? yes.
Money does not come easy!!!!!!!

Thanx rvlv for the help.

I am not looking for easy money. since being in the market i want to know more about it. it is easier to follow advice, at times they too can go wrong. If i lose money, then it is solely because i did not do my home work. every person has some expectations from market, that is human. i want to work it myself and see if it works. i am responsible for all my actions and its consequences. that is is a hard lesson i have learned quite early in my trading & investment days. since tradiing is a everyday learning experience, i am curious about every aspect of it. whether i use it or not, remaining ignorant of the basic facts is a big mistake - considering that a forum like this gives every one a chance to learn and update their thirst for knowledge that has practical applications in this field.

Regards,

Raja Krsnan