Multiple True Strength Index

This is an indicator which is based on the True Strength Index (TSI) developed by Willam Blau and published in his book “Momentum, Direction and Divergence”. This is an enhanced version of the TSI indicator available with NinjaTrader and comes with a number of improvements.

True Strength Index and TSI indicator strategy for NT8

Indicator Description

The original True Strength Index indicator published by William Blau uses an EMA for double smoothing or triple smoothing momentum and absolute momentum. The Multiple TSI indicator offers a selection of 30 different moving averages that you may use for smoothing momentum and absolute momentum. By default, it is set to call an EMA, consistent with William Blau’s original settings. Available trend dataseries for use in a TSI indicator strategy below.

Compared to standard TSI indicators, our version comes with a number of enhancements. One may select the momentum period and use it to calculate the momentum, prior to smoothing it. You can furthermore apply double smoothing with this version of the TSI indicator. The “smoothing period “3” is then set to “1” and for triple smoothing of momentum and absolute momentum. Finally, the True Strength Index has a signal line and a histogram added.

Trend filter for an TSI indicator strategy

The TSI indicator can also be used as a trend filter to show whether the market is  up- or down-trending. You may display the current trend via paint bars. You will find the trend exposed as a public property, for use with automated strategies and/or other indicators. Finally, one may use the True Strength Index as a “paintbar only” indicator. The trend filter uses two different algorithms:

Signal_Slope: This trend definition is mostly based on the slope of the signal line, but also takes into account whether the TSI signal line is overbought or oversold. A trend change typically requires a thrust bar.

TSI_Signal_Cross: This trend definition is mostly based on crosses of the TSI and the signal line. A bullish trend requires that the TSI has crossed the signal line from below. A bearish trend requires that the TSI has crossed the signal line from above.

This TSI indicator can also be used with the our Roofing Filter to correct distortions in the fixed scale threshold readings. One may then use the threshold levels without manually adjusting them according to the current trend scenario.

Other Library Indicators

A TSI indicator strategy should align with a mid/higher time frame trend bias and Volume / Range Analysis. You may for example review the trend bias using the Donchian Channel, Heikin Ashi Candles, the Regression Channel or the Daily Regression Channel. The Donchian Channel, TDI indicator and the Regression Channel were discussed our Indicator Spotlight. For support / resistance, you may review the Fibs from the current day and the ATR for risk management.

For Volume / Range Analysis you may have a look at the Force Index, Relative Volume or Relative Ranges. Indicator Spotlights on the Relative Volume and Relative Ranges are also available.

Apart from the Multiple TSI indicator, our Multiple Series Indicator Category include the Multiple Deviation Bands, Multiple MACD, Multiple Moving Average Wave and the Multiple Keltner Channels indicators.

The True Strength Index indicator is available for NinjaTrader 8.