True Strength Index

What it measures

TSI double-smooths the day-to-day price change with two successive EMAs (default 25 then 13 periods), and does the same to the absolute price change, then expresses the ratio as a percentage. The double smoothing gives a momentum reading that's both responsive to genuine trend shifts and meaningfully quieter than a single-smoothed oscillator like RSI.

How readings are interpreted

TSI oscillates roughly between -100 and +100, though in practice most price action keeps it within a tighter -50/+50 band. Positive TSI means net upward momentum over the smoothed lookback; negative means net downward momentum. A signal-line cross (TSI vs. its own short EMA) is the typical entry/exit trigger.

Conventional levels

• TSI crosses above its signal line: conventionally read as bullish
• TSI crosses below its signal line: conventionally read as bearish
• TSI crosses above zero: broader confirmation of an uptrend developing
• Extreme readings (roughly beyond ±25) are historically associated with overbought/oversold conditions, though the exact level varies by security
• Divergence between TSI and price is treated the same way as RSI divergence — a warning of weakening momentum

Where it works, and where it does not

The double smoothing makes TSI considerably less noisy than RSI or Stochastic, at the cost of being somewhat slower to react. Works across most timeframes; more commonly used on daily charts for swing trading than for very short-term signals.

Commonly read alongside

• MACD: Both are trend-following momentum tools with a signal-line cross mechanic — agreement adds confidence
• RSI: TSI divergence confirming an RSI divergence is a stronger combined signal
• ADX: TSI signal-line crosses are more reliable when ADX confirms an actual trend is underway

Known limitations

• The double smoothing means TSI is meaningfully slower than RSI at signaling a fresh reversal
• Unlike RSI, there's no universally agreed overbought/oversold threshold — it varies by security and needs some calibration
• In choppy markets the signal-line cross can still whipsaw, just less often than faster oscillators

In practice

• The signal-line cross is conventionally treated as the primary signal rather than raw zero-crosses alone
• Because it's smoother than RSI, TSI divergence signals are generally considered more reliable — worth prioritizing over RSI divergence when the two disagree
• Works well as a secondary confirmation tool alongside a faster primary indicator rather than as the sole signal
• Best suited to swing trading given its smoothing lag — not ideal for very short holding periods