I understand your use of quadrants to label Leading, Lagging, Improving and Weakening asset classes. If the Leading quadrant is Quadrant I (in the upper right-hand corner), wouldn't an asset class moving toward Quadrant I also be a good pick? In other words, if the vector of the last data point of an asset class is heading anywhere Northeast, that means that it is starting to outperform (on a relative strength basis and/or absolute basis) versus the previous day. Is there something unique about having to pass the "100" threshold on either axis first?
My concern is that, as an example, if an asset class is in the far lower-left quadrant (Lagging) and makes a bee-line for Quadrant 1 (Leading), would I not be missing out on gains by waiting until it officially passes the 100-markers on your graph?
I realize this would be an aggressive position, but I'm asking more about your calculations as they relate to the normalization of the scores about the 100 lines.
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This forum is dedicated to Relative Rotation Graphs and is your resource for all your questions, suggestions and feedback. We love to hear from you. The forum has several sub-categories. The FAQ is a closed forum where you can read answers to some most Frequently Asked Questions on RRG. RRG General is the area where you can post and get answers with regard to general RRQ questions or issues. RRG on partner systems is where you will find and can ask any questions specifically geared towards the implementations of RRG by our partners
- Emanuel Schroeter
- RRG General
- Saturday, 04 March 2017