True Strength Index: Smoothed Momentum and Trend Signals
Summary
The True Strength Index (TSI) is presented as a momentum-based indicator intended to show trend direction and overbought or oversold conditions. It smooths price momentum, calculated from the change in closing price, with exponential moving averages. The document attributes the indicator to William Blau and says it was first published in 1991. It gives typical smoothing periods of 25 and 13, respectively, while the displayed formula itself is missing from the supplied text.
The described uses are to interpret changes in the indicator’s color as momentum cues and to use crossings of its zero line as possible longer-term trend-change signals. The text claims this combination can respond to turns differently from raw momentum or a moving average alone, but it provides no chart examples, market tests, or rules for entries, exits, and risk controls. It also notes that some platform implementations differ from the original formulation, making formula verification important before comparing signals across tools.
Key ideas
- TSI smooths price momentum with exponential moving averages to assess direction and market conditions.
- The source attributes the indicator to William Blau and dates its publication to 1991.
- Color changes are suggested as momentum cues, while zero-line crosses may indicate longer-term trend shifts.
- The document gives typical smoothing periods but omits the formula in the supplied text.
- No empirical evidence or complete trading rules are provided, and implementations may differ.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.