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TSI — True Strength Index

Overview

The True Strength Index applies a double-smoothing technique to price momentum, producing a clean oscillator that reveals overbought/oversold conditions and trend direction with minimal noise. TSI signals are particularly reliable on daily charts across stocks and crypto. Combine TSI crossovers with the MACD for layered momentum confirmation in your trading strategies.

How It Works

TSI = 100 × [Double-Smoothed Price Change / Double-Smoothed Absolute Price Change]. The double smoothing typically uses a 25-period long EMA and a 13-period short EMA applied to momentum values. A signal line (7 or 12 EMA of TSI) generates crossover signals.

Key Signals

  • TSI crossing above the signal line = bullish momentum.
  • TSI crossing below the signal line = bearish momentum.
  • TSI crossing the zero line confirms a trend direction change.
  • TSI divergence from price indicates fading momentum and potential reversal.

Common Mistakes

  • Ignoring the zero-line context — TSI above zero is inherently bullish.
  • Using TSI on very short timeframes where the double smoothing adds excessive latency.
  • Not combining TSI with volume analysis to confirm the strength of momentum signals.

More Momentum Indicators

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Ultimate Oscillator

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DPO — Detrended Price Oscillator

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