External Relative Strength

IT'S NOT JUST KNOWING WHEN TO GET IN. IT'S KNOWING WHAT YOU'RE GETTING INTO.

One of the most difficult aspects of investing in the stock markets is selecting the BEST PERFORMING STOCKS!

If the above two sentences hold true for you, then its about time you start paying more attention to studying the external relative strength.

Over the course of time there have been few financial activities that occupied the time of more people with less success than attempting to beat the market. So many people have tried and failed, that it has become a popular belief that no one can consistently outperform the market averages.

Everyone cannot beat the market, because everyone in the market is the market. But that does not eliminate the possibility that some investors, if armed with the proper tools to monitor the market and an investment strategy which takes advantage of the information available to them, can realize returns on their investments above the market averages.

External Relative Strength

External Relative Strength is the measure of how a security has performed versus all other securities.  This is superior to comparing a security to an index since most indexes are weighted by market cap or price.

External Relative Strength (ERS) is a technical analysis strategy to help investors sort through all the recommendations and to identify trends of individual stocks. When the upward trends of stocks are identified early enough, the stocks may be purchased and a profit may be realized by a continuance of the trend. Although past performance is not necessarily a determining factor in future performance of a stock, using Relative Strength Analysis for stock selection has proven to be a profitable strategy over time.

This selection, which is used to compare all of the stocks that are being followed, will sort them by their strength rating of the previous week placing a rank on them and then sorting them by the current week's strength rating.

This report is one of the most valuable tools of the trader. The report will show you which stocks are stronger and how much they are stronger than the previous. It provides you with a means of analyzing hundreds of issues without having to look at each of the individual charts to make comparisons. This tool has provided superior returns in testing and in actual practice. The idea is to buy stocks that are experiencing strong upward momentum with the expectations that the stocks will continue to be strong. These can be found within the top 10 or 20 issues.

The TradersEdgeIndia Trend Trading Picks Newsletter and the Trend Trading Picks Weekly Newsletter provides the external relative strength rankings of all of the stocks listed that are constituents of the NSE Nifty, NSE Nifty Junior and the CNX MidCap 200 Index. The relative strength reading in our newsletters will help any investor or trader select the right stocks at the right time for maximum profits. 

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