TSI Indicator

Creator: William Blau

#momentum #oscillator 

Inventor: William Blau 

A double-smoothed momentum oscillator. It takes each bar’s price change, smooths it twice with EMAs, and divides by the double-smoothed size of those changes. The result moves around zero, is much smoother than RSI, and still turns reasonably fast. Plotted with a signal line. 

Default period: 25, 13, signal 7 

Line above zero indicates buyers control the smoothed momentum. Line below zero indicates sellers control it. 

Useful readings: 

TSI crosses above signal line: Momentum turning up 

TSI crosses below signal line: Momentum turning down 

TSI above zero: Bull territory, favor longs 

TSI below zero: Bear territory, favor shorts 

Above +25: Overbought zone; below -25: Oversold zone 

Price at new high but TSI lower: Bearish divergence 

Smoother than RSI with fewer whipsaws, slightly later signals 

Objective rules: 

Bullish: TSI crosses above its signal line. 

Bearish: TSI crosses below its signal line. 

Territory filter: Take only long signals when TSI is above zero, only shorts below zero 

Overbought exit: TSI crosses back below +25 after staying above it 

Oversold exit: TSI crosses back above -25 after staying below it 

What makes it unique: 

Its double smoothing of both momentum and its size produces an oscillator that is smooth yet still centered on a true zero line. It reads like RSI matured. 

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.

This indicator is also available in the System Builder of RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

The indicator is applicable to all types of charting. Calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.