TSI (True Strength Index)

The True Strength Index (TSI) is a double-smoothed momentum oscillator that shows both the direction and overbought/oversold conditions of a trend. It uses double exponential smoothing of price changes to reduce noise while capturing the underlying momentum. TSI ranges roughly between -100 and +100.

TSI applies double EMA smoothing to both the price change and its absolute value:

Double Smoothed PC = EMA(EMA(Close - Close[1], long), short)
Double Smoothed APC = EMA(EMA(|Close - Close[1]|, long), short)
TSI = (Double Smoothed PC / Double Smoothed APC) * 100
Signal = EMA(TSI, signal_period)

Sub-component: TSI_SIGNAL (signal line).

• Above +25 — Strong bullish momentum (potential overbought)
• Below -25 — Strong bearish momentum (potential oversold)
• 0 — Neutral point, separates bullish/bearish momentum
• Signal line crossovers — Primary trading trigger

Buy signals

• TSI crosses above its signal line (bullish crossover)
• TSI crosses above 0 (momentum shift to bullish)
• TSI rebounds from below -25 (leaving oversold)

Sell signals

• TSI crosses below its signal line (bearish crossover)
• TSI crosses below 0 (momentum shift to bearish)
• TSI reverses from above +25 (leaving overbought)

| Parameter | Default | Description | |-----------|---------|-------------| | Long Period | 25 | First EMA smoothing period | | Short Period | 13 | Second EMA smoothing period | | Signal Period | 7 | Signal line EMA period |

| Condition | Meaning | |-----------|---------| | TSI(25,13,7) > 0 | Bullish momentum | | TSI(25,13,7) cross_over TSI_SIGNAL(25,13,7) | Buy signal | | TSI(25,13,7) cross_under 0 | Momentum turned bearish | | TSI(25,13,7) < -25 | Oversold territory |

• Double smoothing makes TSI less noisy than single-smoothed oscillators
• Signal line crossovers above zero are the strongest buy signals
• TSI divergence with price is an excellent early reversal signal
• Works well on daily and weekly charts for swing trading
• Combine with trend indicators for filtering false signals in choppy markets