What is TSI?
The True Strength Index takes the bar-to-bar change in price, smooths it twice, and divides it by the same double smoothing of the size of each change regardless of direction. The result is a single smooth line between -100 and +100, drawn with a signal line and a dashed zero line in its own pane. A reading near +100 means almost every recent move was upwards; near zero means up and down moves have roughly cancelled out.
TSI measures the direction and consistency of recent momentum. It does not measure how far price has moved in price terms, and it does not predict where price goes next.
How to use TSI
- Above or below zero. Above zero, the smoothed up moves have outweighed the down moves. Below zero, the reverse.
- TSI against its signal line. The signal line is an average of TSI itself. TSI crossing above it means momentum has recently improved against its own average, and crossing below means it has faded.
- Distance from zero. The closer TSI is to +100 or -100, the more one-sided the recent moves have been. Values far from zero are uncommon because they need nearly every bar to move the same way.
- Divergence from price. Price making a new high while TSI makes a lower high suggests the move is being made with less consistent momentum.
These are ways to read the line, not entry signals on their own.
Settings
| Setting | Default | What it changes |
|---|---|---|
| Long Length | 25 | Bars in the first, longer smoothing pass. Higher makes TSI smoother and slower to turn. Minimum 1. |
| Short Length | 13 | Bars in the second, shorter smoothing pass applied to the result of the first. Higher adds more smoothing and lag. Minimum 1. |
| Signal Length | 13 | Bars in the exponential average of TSI that forms the signal line. Lower makes crossings more frequent. Minimum 1. |
| Source | Close | Which price the bar-to-bar change is taken from. Open, high, low and the averaged sources such as hl2 and hlc3 are also available. |
Adjust the three lengths and the price source in the indicator settings.
Calculation
Each bar, the indicator takes the change from the previous bar and its absolute size, smooths both with two exponential averages in the same order, and divides one by the other:
change = price - previous price
numerator = EMA( EMA(change, 25), 13 )
denominator = EMA( EMA(|change|, 25), 13 )
TSI = 100 * numerator / denominator
Signal = EMA(TSI, 13)The denominator is what bounds TSI to plus and minus 100. It applies the same smoothing to the size of each move with the direction removed, so the ratio can only reach 100 when every move in the window went the same way. The longer pass is applied first and the shorter second, on both the top and the bottom of the ratio.
Warm-up stacks up through the passes. The first bar has no previous price, so the change starts on the second bar. The 25-bar average then needs 25 changes, the 13-bar pass needs 13 of those, and the first TSI value appears on bar 37 counting from 0. The 13-bar signal line needs 13 TSI values and starts on bar 49. Each exponential average is started from the simple average of its first values.
Limitations
- It lags. Two rounds of smoothing remove noise at the cost of delay. TSI turns after price has already turned.
- It needs a long warm-up. With the defaults, nothing is plotted for the first 37 bars and the signal line for the first 49, which matters on markets with short histories.
- Crossings whipsaw in ranges. When price moves sideways, TSI hovers near zero and crosses its signal line repeatedly.
- The live candle moves. The current bar's values change until that bar closes.
- It is not a strategy. On its own it carries no risk management, sizing or exit.
Frequently asked questions
The True Strength Index is a momentum oscillator. It divides a double-smoothed bar-to-bar price change by the same double smoothing of the size of those changes, which gives a line between -100 and +100. It is drawn with a signal line and a zero line in a separate pane.
Above zero, recent up moves have outweighed down moves; below zero, the reverse. Crossings of the signal line show momentum improving or fading against its own average, and the distance from zero shows how one-sided the recent moves have been. Treat any reading as context and confirm it with price.
Yes. The indicator declares four inputs: Long Length, default 25; Short Length, default 13; Signal Length, default 13, each with a minimum of 1; and Source, default close. Open the indicator's settings on the chart to change them.
Values on bars that have already closed are not revised. The current candle's TSI and signal move while that candle is live and settle when it closes. Because the exponential averages need a starting point, scrolling back to load older history recalculates them and values near the very start of the loaded range can shift.
The SMI Ergodic Indicator in Altrady Charts is built on the same ratio but with shorter default lengths, 20 and 5 instead of 25 and 13, a 5-bar signal line and a histogram of the gap between the two lines. It always uses the close, while TSI lets you choose the source.
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 True Strength Index already applied. On any other market, open the indicator picker on the chart and choose True Strength Index from the Momentum group.