What is Trend Strength Index?
The Trend Strength Index measures how closely the last 14 closes line up along a straight line through time. It reads near +1 when price has risen almost in a straight line, near -1 when it has fallen in one, and near 0 when there is no steady direction at all. It is drawn in its own pane with a dashed zero line.
The Trend Strength Index measures straightness, not size. A slow, steady drift can read close to +1 while a large but jagged rally reads lower. It is also a different indicator from the True Strength Index, which is a momentum oscillator that shares the initials.
How to use Trend Strength Index
- Sign. Above zero the window has trended up on balance, below zero down. Zero is no straight-line relationship with time.
- Distance from zero. Readings near +1 or -1 mean the move has been orderly, with few bars out of line. Readings near zero mean a choppy or sideways window.
- A falling reading in a rising market. When price keeps climbing but the reading slips from near +1, the advance has become less orderly.
- Length. A shorter window reacts sooner and swings to the extremes more easily; a longer one needs a sustained move to read high.
These are ways to read the line, not entry signals on their own.
Settings
| Setting | Default | What it changes |
|---|---|---|
| Length | 14 | Bars in the window being correlated with time. Lower reacts faster and reaches the extremes more easily; higher is steadier. Minimum 2. |
| Source | Close | Which price each bar contributes. Open, high, low and the averaged sources such as hl2 and hlc3 are also available. |
Adjust the window length and price source in the indicator settings.
Calculation
The indicator is the Pearson correlation between price and bar position over the window, calculated from each value's distance to the window's mean:
t = bar position in the window, oldest to newest
p = price of that bar
covariance = sum of (t - mean t) * (p - mean p)
spread t = sum of (t - mean t)^2
spread p = sum of (p - mean p)^2
Trend Strength = covariance / sqrt(spread t * spread p)Working from distances to the mean, rather than from raw sums of prices, keeps the result accurate on high-priced markets where the raw form loses precision.
The line starts once the window holds a full 14 bars. If every price in the window is identical there is nothing to correlate, and that bar has no value. The dashed zero line is drawn by Altrady Charts as a reference; the indicator itself defines no levels.
Limitations
- It ignores magnitude. A move of a few ticks and a move of thousands can produce the same reading, so it cannot tell you whether a trend is worth trading.
- Only straight lines score well. A trend that accelerates, or one with a sharp pullback in the middle, reads lower than its overall direction suggests.
- It lags. The reading describes the last 14 bars as a whole, so a reversal takes several bars to pull it through zero.
- The live candle moves. The current bar's value changes until that bar closes.
- It depends on timeframe and length. The same market can be orderly over 14 bars on 1D and choppy over 14 bars on 15m.
Frequently asked questions
The Trend Strength Index is the correlation between price and time over a window, 14 bars by default. It runs from -1 to +1 and says how closely the closes have followed a straight rising or falling line.
No. The True Strength Index is a momentum oscillator built from double-smoothed price changes. The Trend Strength Index is a correlation with time. They share the initials and nothing else, and Altrady Charts ships them as separate indicators.
The sign gives the direction and the distance from zero gives how orderly the move has been. Near +1 is a clean uptrend, near -1 a clean downtrend, and near zero a sideways or erratic window. It says nothing about the size of the move, so it is often read alongside a measure of slope such as [Linear Regression Slope](/library/indicator/linear-regression-slope).
Yes. The indicator declares two inputs: Length, default 14 with a minimum of 2, and Source, default close. Open the indicator's settings on the chart to change them. Source accepts any of the available prices, including open, high, low, hl2 and hlc3.
No. Each value is calculated from a fixed window of the latest bars, so closed bars are never revised and loading older history does not change them. The current candle's value moves while it is live and settles when it closes.
Use the Add to chart button at the top of this page. It opens BTC/USDT on Binance in the Altrady Charts terminal with the built-in Trend Strength Index already applied. On any other market, open the indicator picker on the chart and choose Trend Strength Index from the Trend group.