Please clarify the similarities and differences of the two (or more?) versions of Relative Strength ("RS") built into Worden Software:

#1) When a RS Plot is added to a chart, what is the formula for what it is actually plotting? Over what time period? (current 1-day difference? 1 year RS? or other period?)

AND: Could you give an example with actual data for a recent date using XLF versus IWZ? (S&P Financial Sector RS versus Russell 3000 ETF funds)

#2) Is the line plotted calculated the same (or not?) as the built-in RS Sorting/Scanning item defined in "Definitions of all built in scanning and sorting criteria" (at http://forums.worden.com/default.aspx?g=postmessage&f=5)? For benefit of readers, the definition reads:

Relative Strength 1-Yr (vs SP-500) - The relative change in price of a stock over the past year compared to the change in the SP-500 over the same time. The calculation is : (Latest Close Price of Stock / Latest Close Price of SP-500) / (Close Price of Stock 1 year ago / Close Price of SP-500 1 year ago) * 100.

#3) Are any different RS measures or plots included in TC 2000 version 12.4? Please explain and provide example(s), if relevant.

(I use both versions of Worden software in both MS Windows and Apple OS X. Because I build lists, charts, and scans in the offline software first, then transfer, I'm posting this question in the TC2000 version 7 forum.)

#4) FYI: I've read offline and online documentation, and searched the Forum, spending lots of time reading posts that don't really answer this question.

So, a suggestion: Offering a fomula, and example, for every built-in item would be a very welcome addition to documentation--saving many man-hours for both users and Support!!

PS--Confirming: I do refer only to RS (not RSI)

If you don't count the Relative Strength Index (RSI) indicator, which isn't really related to relative strength at all, there are two available Relative Strength indicators.

I suspect you are just overthinking this. There is no "period" at all for the plain Relative Strength indicator. The "formula" is in fact provided as a description given in the Relative Strength article from the Online Help Files.

"Relative strength is calculated as the ratio of the price of the active symbol vs the price of the symbol selected in the Relative Strength indicator.

When the relative strength line is moving up, the active symbol is outperforming the RS symbol and under-performing when the line is moving down."

It really is just that simple. So if the active symbol is XLF and the relative strength symbol is IWZ, the Relative Strength indicator would just be the value or price of XLF divided by the value or price of IWZ.

As I write this, that means you would take 22.21 and divide it by 72.35 to get 0.3069799585348998.

But this value, while not quite meaningless, does not tell you how well XLF is performing compared to IWZ. It just tells you that XLF is less than a third the price of IWZ.

The interpretation of the Relative Strength indicator is done by looking to see if it has gone up or down.

No, it is not the same as this version does in fact have a period of one year and has SP-500 as a fixed comparison symbol for this calculation.

Two portions of this formula are the same as the plain Relative Strength indicator however. The current value of a RS indicator with the relative strength symbol set to SP-500 is this part of the formula:

(Latest Close Price of Stock / Latest Close Price of SP-500)

And the value of a RS indicator with the relative strength symbol set to SP-500 from one year ago is this part of the formula:

(Close Price of Stock 1 year ago / Close Price of SP-500 1 year ago)

So what this ends up being is a Momentum indicator with the Data Source of the Momentum indicator set to a Relative Strength indicator where the relative strength symbol is SP-500 and the period is one year (this can only be done in TC2000 version 12.4, not in TC2000 version 7).

The number of trading days between one calendar year ago and today is going to vary from day to day, but you could approximate it by setting the period of the Momentum indicator on a daily chart to somewhere between about 245 and 260 (I would probably use 252, but that is just me).

There aren't any other version of Relative Strength available in TC2000 besides the two which have been described.

For backtesting purposes,  if I wanted to calculate the relative strength "C12" against another symbol also twelve periods ago, would this be possible.  I am not seeing how.  Is there a way?

Are you just interested in the Relative Strength from 12 bars ago? Add a 1 period simple moving average to the Relative Strength indicator and set the offset to 12.

That said, such a value in isolation is pretty much meaningless. It is only relative to other values that you can interpret the Relative Strength indicator. In v17, you could do this by say adding a Rate of Change % Indicator to the chart and changing the Data Source to use Relative Strength instead of Price History.

OK ... so I end up with a ROC% applied against the (c12 ) target symbol and then I do the same against the benchmark symbol on a separate chart.  The two values are definitely not going to be on the same chart. (correct?)

To compare the values, I then have to either put one chart below the other and read the values, or compare them across scan results and a watchlist for the benchmark, (or as 2 symbols within one watchlist).

Is that about right?  Any suggestions?

thanks

The Rate of Change Percent Iindicator isn't applied to price, it is applied to Relative Strength.

• Add a Relative Strength indicator to the chart.
• Add a Rate of Change % Indicator to the chart and change the Data Source to the Relative Strength Indicator.

Normally the Relative Strength is going to compare the active symbol to the comparison symbol. So if you just want to compare two symbols, set one of the symbols to the active symbol and one of the symbols to the symbol in the Relative Strength indicator.

But, if you want to include a symbol that isn't the active symbol, you can add that symbol to the chart as its own indicator. Then change the Data Source of the Relative Strength indicator to use the indicator displaying the prices of the other symbol instead of the active symbol.

To get a bars ago version of the ROC% indicator instead of a bars ago version of the RS indicator itself, add the 1 period simple moving average to the ROC% indicator with the Offset setting set to the desired number of bars ago (in this case 12).

OK.  Got it!!  Thanks and the best of the season to you and yours.

You're welcome. Best of the season to you as well!