Core Purpose
To answer: 'After filtering out random fluctuations, is price still pushing consistently in one direction?'
What is it?
Most momentum indicators treat all price changes equally, even noise.
TSI filters out random fluctuations using double smoothing. It answers:
"After filtering out the noise, is price still pushing consistently in one direction?"
If yes, momentum is real. If not, it's just noise. TSI is not fast — that is exactly why it is valuable.
Expanded Definition
Deeper Explanation
Real momentum is not about single price changes. It is about sustained directional pressure.
TSI asks: "If I smooth price changes *twice*, does a directional bias still remain?"
Only persistent pressure survives this process. That surviving pressure is "True Strength".
Market Psychology
Noise comes from disagreement. Momentum comes from agreement over time.
TSI measures agreement, not excitement.
It often feels slow, which protects traders from over-reacting to short-term wiggles.
It oscillates around zero. Staying on one side for a long time indicates a real trend, not just a swing.
How it is Constructed
Concept: Double Smoothing using EMAs.
1. Smooth the Momentum (Price Change) with a 25-period EMA.
2. Smooth *that* result with a 13-period EMA.
3. Do the same for Absolute Momentum.
4. Divide the Double Smoothed Momentum by the Double Smoothed Absolute Momentum.
Result: A value between -100 and +100.
Conceptual View
1. Calculate Momentum (Price Change from previous bar).
2. Calculate 25-period EMA of Momentum.
3. Calculate 13-period EMA of *that* 25-period EMA.
4. Normalize it by dividing by the double-smoothed Absolute Momentum.
5. Multiply by 100.
How to Read & Interpret
Direction
Price Relationship
Value Zones
Trend Strength:
Healthy Trend: TSI moves decisively away from zero. Pullbacks reduce TSI but do not flip it.
Choppy Market: TSI struggles to hold direction, hovering near zero. (Signal to stop trading).
Directional Context
Divergence (Professional Use):
Bearish Divergence: Price Higher High, TSI Lower High. (Price advanced, but sustained momentum weakened).
Bullish Divergence: Price Lower Low, TSI Higher Low. (Selling pressure running out of steam).
These signals warn of trend fatigue, not instant reversal.
Settings & Configuration
Default Settings
Long: 25, Short: 13
William Blau's original settings. Designed to capture meaningful persistence.
Popular Settings by Timeframe
Intraday Trading
- Standard (25, 13)
Swing Trading
- Standard (25, 13)
Long-term
Tweaking for speed often defeats the purpose of 'True' strength. It is meant to be slow.
Sensitivity vs Reliability
Asset-Class Wise Adjustment Logic
Stocks
Excellent for trend following
Indices
Great for filtering noise in choppy periods
Forex
Useful on higher timeframes (4H/Daily)
Crypto
Helps distinguish real breakouts from 'bart' patterns (fakeouts)
Professional Tweaks
Professionals use TSI to: - Confirm trend quality (Is the move backed by persistent pressure?) - Filter false momentum - Stay aligned with sustained moves - Avoid emotional exits
When NOT to Change
Don't make it faster. If you want fast, use RSI. TSI is for confirmation.
Common Mistakes
Using TSI for scalping (too slow)
Expecting frequent signals
Treating high values as 'Overbought' reversal zones
Ignoring the Zero Line bias
Practical Example
Price rallies sharply on news. RSI spikes to 80. Traders short. TSI rises steadily but hasn't reached an extreme. It shows the move is backed by sustained buying, not just a flash spike. The price continues rallying for weeks. The TSI user stayed in; the RSI user got crushed.
Limitations
- Lags sudden news events
- Produces fewer signals
- Ineffective in very short timeframes
- Requires patience
Learning Progression
Learn Before This
Learn Next
Educator's Note
Most momentum indicators react to movement. TSI waits for proof. It asks: 'Did pressure persist after the noise faded?'
Quick Facts
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