What it is
TSI was developed by William Blau. Double smoothing removes most of the candle-to-candle noise while keeping the line close to price, so it gives cleaner crosses than RSI or MACD on the same chart.
It does three jobs at once: the side of 0 shows trend, the slope shows whether momentum is building, and the signal line cross gives an entry trigger.
How it is calculated
1. Work out the change in close from the previous candle. 2. Smooth that change with a 25 period EMA, then smooth the result with a 13 period EMA. 3. Do the same with the absolute change (ignoring the sign). 4. TSI = 100 x the double-smoothed change divided by the double-smoothed absolute change. 5. The signal line is an EMA of TSI, 13 periods by default here (7 is also common).
Settings
| Setting | Default | Range | What it changes |
|---|---|---|---|
| Long | 25 | 2 to 200 | The first, longer smoothing. Higher makes the line slower and steadier. |
| Short | 13 | 2 to 100 | The second, shorter smoothing. Lower makes the line react a little faster. |
| Signal | 13 | 1 to 100 | The EMA used for the signal line. A shorter signal (7) gives earlier but more frequent crosses. |
How to read it
How to trade it
- 1
Read trend from the side of 0 on a 1 hour gold chart: above 0, look for longs only.
- 2
Wait for a pullback where TSI dips towards or under its signal line.
- 3
Enter long when TSI crosses back above its signal line on a closed candle.
- 4
Stop below the pullback low, for example 8 to 12 points on a 1 hour gold chart.
- 5
Target 2 times the stop, or exit when TSI crosses below its signal line from above +25.
The long is cancelled if TSI crosses back below 0, or if price closes below the pullback low.
WickSpeak writes a plain-English reading of TSI on the live candle: what it measures, which way smoothed momentum points now, how to trade the current reading and what would prove it wrong. In Playbook, a condition can check when TSI crosses above or below its signal line, crosses above or below zero, stays above or below zero, crosses above or below a level you set, is above or below a level you set, sits between two levels you choose, has come up from a low level, or down from a high one, within a number of candles you choose, or is rising or falling.
WickSpeak True Strength Index is one of the extra WickSpeak versions of the oscillators. The line is coloured by strength: faint when the reading is weak, glowing when it is strong, mint above the zero line and pink below it. Crosses of the zero line are marked only once the candle has closed, so a marker never vanishes after it appears. A gold marker shows a stretched reading, the strongest few percent of the indicator's own range. Divergences between price and the line are drawn on both the chart and the indicator, and a chip shows the same reading on a higher timeframe.
Best markets and timeframes
Good on 15 minute to daily charts of gold, US30, NAS100 and major forex pairs. It is smooth enough to trend-follow on the 1 hour and 4 hour charts with few false crosses.
Common mistakes
- Taking every signal cross against the trend. Crosses below 0 that point up are low quality in a downtrend.
- Treating +25 as a sell. It shows strength; strong trends can hold above it.
- Changing all three settings at once and losing track of what made the difference.
Works well with
Questions traders ask
What are the best TSI settings?
The classic settings are 25 and 13 with a signal line of 7 to 13. WickSpeak defaults to 25, 13 and 13. Faster versions such as 13, 7 and 7 suit lower timeframes but give more noise.
What is the difference between TSI and MACD?
MACD is the gap between two price averages and has no fixed scale. TSI is double-smoothed momentum divided by its own size, so it is bounded between -100 and +100 and can be compared across markets.
What are overbought and oversold levels on TSI?
There are no fixed rules, but +25 and -25 are widely used. Some traders prefer to mark the extremes the line has reached on their own market.
Is TSI good for trend trading?
Yes. Its double smoothing keeps it on one side of 0 for most of a trend, and signal line crosses in that direction give pullback entries.