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ETF Trading and Investing Strategies (Collection) by Marvin N. Appel, Leslie N. Masonson, Tom Lydon

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Chapter 6. Using Relative Strength Analysis to Determine Where to Invest

“Never follow the crowd.”

Bernard Baruch, financier

“I can calculate the motions of the heavenly bodies but not the movements of the stock market.”

Isaac Newton, scientist

The Basic Premise of Relative Strength Analysis

Relative strength analysis (RSA) is one approach that has been thoroughly tested over decades by academicians and used profitably by money managers, traders, and investors. The logic behind RSA is that the top performing stocks stay strong for weeks or months at a time and therefore provide investors with a significant money making opportunity. The main thesis of RSA is that the highest-ranked stocks based on price performance ...

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