WY-06-25 / 02
Comparing an Instrument with the Overall Market, Industry, or a Suitable Benchmark
Decisions, Execution & Validation
Lesson / WY-06-25
Valid comparison begins with comparable data. Use the same time window, information cutoff, and consistent trading sessions for both instrument and benchmark. Apply consistent stock-price adjustment rules so dividends and splits do not create false jumps; use a common quotation currency for assets in different currencies or isolate the exchange-rate effect; check the rollover construction of continuous futures contracts. If an instrument is suspended while the benchmark keeps trading, or if two markets have substantially different opening and closing times, daily comparisons can mistake data gaps for relative performance.
Course content is for learning and research only. It is not investment advice.
Read the Chapter ↗Timestamps
7 lessons · Chapter contents
01Purpose and Comparison Universe of Relative Strength Analysis↗02Comparing an Instrument with the Overall Market, Industry, or a Suitable Benchmark↗03Relative Performance During Advances and Pullbacks↗04Relative Strength Ratios and Swing Comparisons↗05Relative Strength Analysis Versus the RSI Indicator↗06Joint Screening of Relative Performance, Structural Location, and Potential Risk↗07From Initial Screening to Trade Execution↗Observe the market: start with context and place price within its structure.
Understand structure: compare supply and demand, and let evidence support or revise your hypothesis.
Form a view: define risk limits and know when to reassess.
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Point-and-Figure Charts and Price Target Estimation
The Nine Buying and Selling Tests and Trading Scenarios
