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Hi everyone!
I've always suspected that Relative strength (or the performance of
one security versus say an index) could be profitably used in trading.
I've noticed relatively stronger securities tend to outperform and
weaker securities tend to keep getting weaker.
Whenever I get to know of a new trading idea, before I start trading
using the said new idea, I always try to SYSTEM TEST the trading idea.
This way I KNOW quantitatively whether the system would have worked in
the past at least. This is very easy for most well known indicators
such as MACD, RSI etc. as all software packages have System tests pre
installed for these popular indicators. My problem is, how do I system
test for Relative Strength to decide whether they really work AND if I
can build a mechanical trading system based on RS. I am sure some
RT'ers have thought about this in detail and have lots of experience
in these and I will appreciate any input from anyone.
I use Metastock 5.0
Happy Christmas!
Rifki Sameem
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