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I tested all of the methods discussed in the previous posts. I used
Jose's URSC, the ROC method and the price averaging formula. Debry is
a completely different method and won't give comparable answers.
I tested the three formulas on the IBD stock list and the S&P 500. In
both cases, Jose's final list was closer to the IBD rankings. The
other methods were okay but not as accurate--my opinion. The IBD list
is sorted by EPS rankings so it has to be resorted by RS. IBD only
uses two figures for their ranking. The other three methods use 4
decimal places which means a lot of stocks are tied in the IBD
rankings but rank more precisely by the other methods.
I also thought that Jose's method did a better job of sorting the
stocks across the whole market. In addition, I've built trading
systems using Jose's code and the systems are very good. I haven't
tested these other methods in trading systems yet. I can see the
price averaging method won't work on shorter time frames like the
last 20 trading days, which is one of the systems I like.
Here's the bottom line--my opinion--if you want something that works
maybe okay and is free, use the simple formulas, especially if you
trade as a hobby. I make my living from trading, so spending a couple
of hundred bucks on a real tool is trivial considering the dollar
volume of trading done with it. Since I want my trading systems to
work right, I use what I trust. I know exactly what I'm getting from
Jose's code, so why bother with anything else.
When I first got it, I tested it against a number of other RS ranking
systems and it was giving me very similar, if not exact results.
Everyone has a different ranking system. The problem is simply
knowing the RS value of a stocks is not a mehtod of trading. You
can't build a system around an RS number. At least I can't. However,
you can incorporate the formulas with other TA formulas to make a
trading system.
If you just want RS rankings, you can get those free at:
http://www.marketscreen.com/report/index.asp?
chp=technical&xmlfile=index_59.xml&archive=2004_12_17&usettt=&desc=
However, as I said rankings alone don't mean much. You'll find just
as many profitable stocks at the bottom of the rankings as at the
top. (I've tested that also.)
Roy's newsletter has some great articles on explorations and using RS
code in them. That information alone will make you a ton of money. I
think $119 a year is way too cheap. Roy should raise the price to at
least $149 a year because Equis could sell it for $250 a year and you
would be begging for more.
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