Relative Strength (not RSI) indicator

Hi, welcome to this new video. The topic of today is the relative strength that is this indicator you see here. In a previous video I said that when we look for long or short trades, we may have a look at what the S&P 500 is doing, especially if we are looking for trades in the US market. Why? Because if the S&P 500 is trending up, is probably better to look for long entries. And if the S and P is trending down, maybe we can look for short entries. Unless you're doing some kind of hedging. But this is another topic and in the previous video I mentioned that we can use moving averages to identify the trend of the S and P. But today I want to introduce you to this indicator that you can see here, the relative strength. That is basically a way to understand if the stock we are looking at is doing better or worse than the S and P. So on top of looking at the trend of the S and P, we can also check if our stock is better than the S and P. So the idea is if SP is trending up, we are looking for opportunities and we find a stock that is also better than S and P. And how to know that? Well, with this indicator, when you see the green line, this kind, I mean the color depends. But when you see this line above the flat line, the reference line, it means we are doing better than the S and P. As you see here, relative strength is in reference to the SPX, that is the S&P 500 index. So how to do that, how to include that in the tinkorswim platform that I'm showing you now you go to the list of indicators here and you find the relative strength that is this. Okay, Be careful that this is not the RSI relative strength index. That's another indicator, okay? That is an oscillator that is moving between 0 and 100. And these are different things. But here we are looking at this relative strength. So I already have it here just to show you what you have. The thing you can decide is the reference you are taking. So default is SP 500, the SPX index. But you can also include something else. So if you are, for example, looking for opportunities in some other market, you may include the index of that market. Okay, so we keep this spx and this is an example of Google. So it seems that Google is doing better than the SP 500. But just to show you, Oil is not doing well recently. And as you can see from here, it started a bit drop and is worse than the S and P because this line is below the red. So if the line is below and is also sloping down is even a stronger indication as well, if the line is above the reference line and is sloping up is also strong indication that the trend the stock is stronger than the S and P. And of course if we check the SPX we should get the same, right? Yeah, as you can see, the red and the green line coincide because the strength of the S and P compared to the S and P is basically zero is the same thing, right? So that's all. I just wanted to introduce you to this new indicator because you can check the strength of stock with other websites, but often you have to pay. But if you have tinkorswing, this is already implemented. I'm not sure if you can find it in other platforms and it's quite easy to visualize. It can be an additional filter as the indicators. The three indicators that I include in previous video, the Force Index, MACD and Parabolics are this one can be another filter that you can use to narrow down the stocks that you consider as possible entries. And maybe in the next video we show you also how to use the tinkorswim script, the screener that tinkorswim is giving you to implement your screener. And then this way you can get the list of stock to check without the need to check one by one visually. And with that I would like to thank you for watching. If you like this video, subscribe to this channel to be updated when I will upload new videos and as usual see you next time.