Mirror TSI-MACD

The Mirror TSI-MACD indicator is a momentum-based oscillator that combines elements of the True Strength Index (TSI) and the Moving Average Convergence Divergence (MACD) to identify trend reversals and potential entry/exit points. By calculating the TSI of a MACD line and mirroring its value, it creates a symmetrical framework for analyzing price momentum and signal line interactions.

Usage

The Mirror TSI-MACD can be utilized to identify shifts in momentum and trend direction. Traders typically look for interactions between the TSI line (blue), the Mirror TSI line (red), and the Signal line (green).

There are two primary methods for interpreting the indicator:

• Trend Reversal Strategy: Enter a long position when the Blue line (TSI) crosses above the Red line (Mirror TSI). Traders may choose to exit when the Green line (Signal) crosses the Blue line, suggesting a weakening trend.
• Crossover Strategy: Enter a long position when the Blue line crosses above the Red line and exit the position when the Blue line crosses back below the Red line, capturing the core of the momentum cycle.

Details

The indicator construction begins by calculating a standard MACD (the difference between a fast and slow EMA). It then applies the TSI formula to the MACD values. The TSI involves taking the double-smoothed change in MACD and dividing it by the double-smoothed absolute change in MACD.

A unique feature of this tool is the "Mirror" component, which provides an inverse plot of the calculated TSI. This creates a balanced visual representation where crossovers of the TSI and its mirror highlight significant momentum shifts. A signal line is also included, calculated as either an EMA or SMA of the TSI, to provide smoother trend indications.

Settings

• Fast Length: The period for the fast Exponential Moving Average used in the initial MACD calculation.
• Slow Length: The period for the slow Exponential Moving Average used in the initial MACD calculation.
• First R: The first smoothing length used for the TSI calculation.
• Second S: The second smoothing length used for the TSI calculation.
• Source: The price data source used for calculations (e.g., Close, Open, HL2).
• Signal Smoothing: The lookback period for the Signal line smoothing.
• Simple MA (Signal Line): When enabled, the indicator uses a Simple Moving Average (SMA) for the signal line instead of an Exponential Moving Average (EMA).

FAQ

How do I interpret the Mirror TSI-MACD?

The indicator identifies momentum shifts when the primary TSI line (blue) crosses its mirror line (red). Crosses above the mirror line suggest bullish momentum, while crosses below suggest bearish momentum.

What is the difference between the TSI and Mirror TSI?

The TSI represents the double-smoothed momentum of the MACD, while the Mirror TSI is simply the negative value of that TSI. They are plotted together to create a symmetrical oscillator for easier crossover identification.

How can I access the Mirror TSI-MACD?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.