⚠️ Personal research and trading notes — not investment advice. The author is not a licensed advisor.
The question our readers ask most often is: "This RS you mention every day — what actually is it?"
Here's the full answer — what RS is, how it's calculated, why it matters, and most importantly: why a stock that is stronger than the market has better odds than one that is about to bounce back.
Definition
RS Rating (Relative Strength Rating) is a number from 1–99 that tells you how much stronger a stock is than every other stock in the market over the recent period.
- RS 99 = this stock's price performance beat 99% of all stocks in the market
- RS 50 = middle of the pack
- RS 20 = weaker than 80% of the market
It is not price, not company earnings, not dividends — it is a ranking of price strength relative to every other stock in the market.
How It's Calculated (Simply)
We look at a stock's price return over the trailing 12 months (weighted toward the most recent 3 months, because recent momentum matters more), then rank it into a percentile against every stock in the market.
The result is a 1–99 number you can compare instantly — you don't need to know the share price, just where it ranks in strength.
Why It Matters: Institutions Leave Footprints
Stocks don't make big sustained moves because of retail investors. They move because large institutional money accumulates positions over weeks and months.
That accumulation leaves a footprint on the chart — price that stays consistently stronger than the market. That is exactly what RS measures. It is a detector of institutional footprints.
William O'Neil studied the biggest-winning stocks across 100+ years of US market history and found: before those stocks made their largest moves, they already had high RS — on average RS 87 before the big advance began.
Meaning: tomorrow's leaders are usually stronger than the market before most people notice.
The Biggest Trap: "Buy the One That Dropped — It'll Bounce"
Most traders' instinct is to look for weak stocks (low RS) and think "it's fallen so much, it has to bounce."
The data says the opposite. Low-RS stocks tend to stay weak — there's a reason institutions aren't buying them. High-RS stocks tend to stay strong — big money is still accumulating.
We tested this on Thai stocks over 20 years. The result: chasing strength (high RS) beats bargain-hunting weakness (low RS) clearly and consistently.
How We Use RS
RS is not a buy signal by itself — it's the first filter.
Our system uses RS ≥ 80 as a minimum gate, then looks at: - Is the stock building a good base? - Is there a low-risk entry (pivot)? - Does the overall market favor attacking, or waiting?
RS tells you "which names are interesting." The chart and market condition tell you "when to enter, and at what risk."
Summary
RS Rating is a compass pointing to the stocks institutions are accumulating before price runs. It's not the final answer, but it's the right starting point — start from strength, not weakness.
We track RS for all 732 Thai stocks every day, and send the strongest names + the setups forming, free every week.
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