Blau Ergodic TSI: Double-Smoothed Momentum and Signal-Line Colors

Summary

The document explains the Ergodic True Strength Index as a double-smoothed momentum indicator with one smoothing period fixed at five price bars. It distinguishes this form from a regular TSI and describes adding an exponential moving average to create a signal line. The indicator can color its display when the TSI crosses its signal line, crosses zero, or changes slope, offering several visual ways to read momentum shifts.

These color changes are presented as possible signals, while the author recommends experimenting with smoothing choices rather than treating the Ergodic label as a guarantee of better behavior. The text notes that William Blau often uses 25 and 13 for the first two smoothing periods and calls that combination broadly acceptable. It offers no market examples, performance tests, entry or exit rules, or risk controls, so the suggested settings and color cues should be understood as indicator guidance rather than a validated trading system.

Key ideas

• The Ergodic TSI is a double-smoothed momentum measure with one smoothing period set to five bars.
• An exponential moving average can provide a signal line for the TSI.
• Color changes can mark signal-line crosses, zero-line crosses, or changes in slope direction.
• The document suggests experimenting with smoothing parameters and gives 25 and 13 as commonly used values.
• It provides no performance evidence or complete trading rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.