OPEN-SOURCE SCRIPT
RSRW
Description:
The given Pine-Script, titled "Real Relative Strength (RSRW)," is designed to evaluate the relative strength of the selected security compared to a benchmark security, defaulting to "SPY". It utilizes TradingView’s programming language and is structured to run on its platform.
Functionality:
Rolling Price Change Calculation:
It calculates the rolling price change for both the selected security and the comparison
security over a user-defined length of periods, defaulting to 12.
Rolling ATR Change Calculation:
It computes the Average True Range (ATR) over the specified length for both securities,
providing insights into market volatility.
Power Index Calculation:
It computes the power index by dividing the rolling move of the comparison security by its
rolling ATR, offering a measure of market strength or weakness relative to volatility.
Real Relative Strength (RRS) Calculation:
It determines the Real Relative Strength of the selected security against the benchmark,
adjusting the relative price move by the power index and dividing by the security's rolling
ATR.
Correlation:
The script also evaluates the correlation between the selected security and the compared
security over the defined length, providing a correlation coefficient that is represented
visually by different colors.
Visual Representation:
The Real Relative Strength is plotted with a blue line.
A red line represents the baseline (0).
Correlation is displayed with a color-coded line, ranging from green (high positive
correlation) to red (high negative correlation).
Utility:
This script is valuable for traders and investors looking to assess the relative performance of securities against a benchmark, factoring in volatility and correlation, enabling more informed investment decisions based on market dynamics.
License:
This script is subject to the terms of the Mozilla Public License 2.0.
The given Pine-Script, titled "Real Relative Strength (RSRW)," is designed to evaluate the relative strength of the selected security compared to a benchmark security, defaulting to "SPY". It utilizes TradingView’s programming language and is structured to run on its platform.
Functionality:
Rolling Price Change Calculation:
It calculates the rolling price change for both the selected security and the comparison
security over a user-defined length of periods, defaulting to 12.
Rolling ATR Change Calculation:
It computes the Average True Range (ATR) over the specified length for both securities,
providing insights into market volatility.
Power Index Calculation:
It computes the power index by dividing the rolling move of the comparison security by its
rolling ATR, offering a measure of market strength or weakness relative to volatility.
Real Relative Strength (RRS) Calculation:
It determines the Real Relative Strength of the selected security against the benchmark,
adjusting the relative price move by the power index and dividing by the security's rolling
ATR.
Correlation:
The script also evaluates the correlation between the selected security and the compared
security over the defined length, providing a correlation coefficient that is represented
visually by different colors.
Visual Representation:
The Real Relative Strength is plotted with a blue line.
A red line represents the baseline (0).
Correlation is displayed with a color-coded line, ranging from green (high positive
correlation) to red (high negative correlation).
Utility:
This script is valuable for traders and investors looking to assess the relative performance of securities against a benchmark, factoring in volatility and correlation, enabling more informed investment decisions based on market dynamics.
License:
This script is subject to the terms of the Mozilla Public License 2.0.
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
Want to use this script on a chart?
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.