Strategy
Relative Price Strength (JSE Shares) - 15 September 2020
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Published on 2020-09-15
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Relative Price Strength (RPS) is a trading strategy to assist traders to make more informed trading decisions.
At present 160 odd shares are constituents of the JSE All Share index. This number is too large for any trader to screen at frequent intervals. However, the least time-consuming and most objective method is to screen all shares based on a periodic basis using RPS.
Traders are rewarded for buying the strongest shares and avoiding the weakest or short-selling those. Strong performing shares tend to get stronger, while the weak tend to get weaker. This makes sense because markets love its winners and hate its losers.