True Strength Indicator (TSI)

True Strength Indicator (TSI)

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True Strength Indicator (TSI)

Variable List Abbreviation: TSI

 

Variable Mode(s): Standard, Stock, Futures1, and Futures2

[ Note: uses selected close variable in Stock, Futures1, and Futures2 modes ]

 

Parameter(s): TSI inside factor, TSI outside factor

 

Description:

Price momentum oscillator which smoothes the noise in momentum to indicate changes in market trends.  Useful for detecting overbought and oversold market conditions, which in turn indicate the possibility of a reactionary trend reversal.  The noise in the momentum is reduced by using a double smoothing.  It has been suggested that the inner exponential average be a long term smoothing, while the outer exponential average be a short term smoothing.

 

Calculation:

                        TSI = 100 *           ExpMovAvg ( ExpMovAvg ( momentum ) )              

                           ExpMovAvg ( ExpMovAvg ( absolute value of ( momentum ) ) )

where

momentum = value - previous value