True Strength Index
By LuxAlgoApr 13, 2020
True Strength Index is an indicator on Vela, our next-generation charting platform, written in Pine Script®.
The True Strength Index (TSI) double-smooths one-bar price change and its absolute value with successive EMAs, then plots their ratio as a momentum oscillator centered on zero. William Blau's ratio asks how much of recent movement has been directional: the numerator keeps each bar's sign, the denominator strips it, bounding the line between +100 and -100 by design. This build reproduces the standard published calculation without modification, using the classic 25 and 13 smoothing lengths with a 13-period EMA signal line and a dashed zero line.
How to Trade the True Strength Index?
- TSI above zero: smoothed up momentum outweighs down momentum, the regime read favoring longs.
- TSI below zero: sustained stretches below zero define the bearish regime.
- TSI crossing above the Signal line: the timing trigger, earlier and less reliable than zero crosses; many honor only crosses agreeing with the zero-line side.
- TSI crossing below the Signal line: the mirror trigger, filtered the same way.
- Divergence at extremes: the deep smoothing yields clean swings, so higher-low and lower-high comparisons against price are easy to mark.
The same smoothing sets the cost: the line turns after price, and in ranges small oscillations around zero flip the sign without saying much.
True Strength Index Settings
- Long Length (default 25): the first (long) EMA applied to the one-bar price change; it does the heavy filtering. Raising it steadies the line and deepens the lag.
- Short Length (default 13): the second (short) EMA applied to the long-smoothed change, shaping response within the filter.
- Signal Length (default 13): the EMA of TSI forming the signal line; shorter trades cross quality for speed.
Alerts
Four alert conditions: TSI crossing above or below its signal line, and above or below the zero line.
Frequently Asked Questions
Free to use
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