True strength index

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The true strength index ( TSI ) is a technical indicator used in financial market analysis that attempts to show the direction of overbought/oversold trends and conditions. It was first published by William Blau in 1991. This indicator uses the moving average of the momentum underlying the financial instrument. Momentum is considered a key indicator of price movement, and the moving average is characteristically lagging behind the price. TSI combines these characteristics to create price indications and directions that are more synchronized with market changes than momentum or moving averages. TSI is provided as part of the standard collection of indicators offered by various trading platforms.

Video True strength index

Calculation

TSI adalah indikator "kelipatan ganda"; artinya bahwa rata-rata bergerak yang diterapkan pada data (momentum harian dalam kasus ini) diperhalus lagi oleh rata-rata bergerak yang kedua. Perhitungan untuk TSI menggunakan rata-rata bergerak eksponensial. Rumus untuk TSI adalah:

${\ displaystyle TSI (c_ {0}, r, s) = 100 {\ frac {EMA (EMA (m, r), s)} {EMA (EMA (| m |, r), s)}}}  ÂÂ$

dimana

c ₀ = harga penutupan hari ini

m = c ₀ Â- c ₁ = momentum ( perbedaan antara hari ini dan kemarin dekat)

EMA ( m , n ) = rata-rata bergerak eksponensial m di atas n periode, yaitu,

${\ displaystyle EMA (m_ {0}, n) = {\ frac {2} {n 1}} \ kiri [m_ {0} -EMA (m_ {1 }, n) \ right] EMA (m_ {1}, n)}  ÂÂ$

r = periode perataan EMA untuk momentum, biasanya 25

s = periode perataan EMA untuk merapikan momentum, biasanya 13

Maps True strength index

Interpretasi

While the TSI output is bound between 100 and -100, most values ​​fall between 25 and -25. Blau suggests interpreting these values ​​as overbought and oversold levels, respectively, at which point traders can anticipate the turn of the market. The trend direction is indicated by the TSI slope; The rising TSI shows a trend in the market, and the decline in the TSI shows a downward trend.

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See also

• Relative Strength Index

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References

Source of the article : Wikipedia