True Strength Index (25, 13)

The True Strength Index (25, 13) is a momentum oscillators indicator used in Skyrexio Strategy Builder for momentum analysis and overbought/oversold identification.

Introduction

The True Strength Index (TSI) is a double-smoothed momentum oscillator that filters out market noise while maintaining sensitivity to significant price changes. Developed by William Blau, TSI uses two exponential moving averages applied to momentum calculations, creating a cleaner signal that helps identify trend direction changes and momentum shifts with reduced false signals.

How True Strength Index Works

True Strength Index applies double smoothing to momentum calculations to create a refined oscillator:

• Double smoothing process - Applies two exponential moving averages (25 and 13 periods) to momentum data • Unbounded oscillator - Can move above and below zero without fixed limits • Noise reduction - Double smoothing filters out short-term fluctuations while preserving trend signals • Signal line - Often paired with a signal line (EMA of TSI) for crossover signals • Zero line significance - TSI above zero indicates bullish momentum, below zero indicates bearish momentum

Double Smoothing Psychology: TSI's double smoothing process removes the noise that plagues other momentum indicators while maintaining responsiveness to genuine trend changes. This makes it particularly valuable for identifying sustainable momentum shifts rather than temporary price spikes.

Key Characteristics

Attribute	Details
Category	Momentum Oscillators
Type	Double-Smoothed Momentum Indicator
Primary Use	Trend direction and momentum change identification
Timeframe	All timeframes supported (1m to 1M)
Confirmation	Signal line crossovers, zero line crossovers, divergence analysis

Strategy Applications

🟢 LONG STRATEGY (Bullish Momentum)

TSI is highly effective for LONG strategies when identifying bullish momentum shifts and trend changes. TSI crossing above zero or its signal line indicates strengthening bullish momentum, while rising TSI values confirm uptrend continuation.

Base Entry Order (LONG)

Trigger Type: Once per bar close
Bar TF: 1H
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Cross Above
Second Condition: Value
Value: 0

AND

First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

Additional Entry Orders (LONG)

Additional Entry 1: TSI momentum acceleration
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Greater Than
Second Condition: True Strength Index (25, 13)
Timeframe: 1H

AND

First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 5

OR

Additional Entry 2: TSI signal line crossover
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Cross Above
Second Condition: TSI Signal Line
Timeframe: 1H

AND

First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: -10

Take Profit Orders (LONG)

Rule 1: Exit condition - TSI momentum exhaustion
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Less Than
Second Condition: True Strength Index (25, 13)
Timeframe: 1H

AND

First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 20

OR

Rule 2: Exit condition - TSI signal line bearish crossover
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Cross Below
Second Condition: TSI Signal Line
Timeframe: 1H

OR

Rule 3: Exit condition - TSI zero line rejection
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Cross Below
Second Condition: Value
Value: 0

Stop Loss Orders (LONG)

Rule 1: Stop loss - TSI turns negative with momentum
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: -5

AND

First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Less Than
Second Condition: True Strength Index (25, 13)
Timeframe: 1H

OR

Rule 2: Stop loss - TSI signal line breakdown
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Cross Below
Second Condition: TSI Signal Line
Timeframe: 1H

AND

First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 0

OR

Rule 3: Stop loss - Volume confirms bearish momentum
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

AND

First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: -10

🔴 SHORT STRATEGY (Bearish Momentum)

TSI is equally effective for SHORT strategies when identifying bearish momentum shifts and trend changes. TSI crossing below zero or its signal line indicates strengthening bearish momentum, while falling TSI values confirm downtrend continuation.

Base Entry Order (SHORT)

Trigger Type: Once per bar close
Bar TF: 1H
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Cross Below
Second Condition: Value
Value: 0

AND

First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

Additional Entry Orders (SHORT)

Additional Entry 1: TSI negative momentum acceleration
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Less Than
Second Condition: True Strength Index (25, 13)
Timeframe: 1H

AND

First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: -5

OR

Additional Entry 2: TSI signal line bearish crossover
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Cross Below
Second Condition: TSI Signal Line
Timeframe: 1H

AND

First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 10

Take Profit Orders (SHORT)

Rule 1: Exit condition - TSI momentum exhaustion
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Greater Than
Second Condition: True Strength Index (25, 13)
Timeframe: 1H

AND

First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: -20

OR

Rule 2: Exit condition - TSI signal line bullish crossover
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Cross Above
Second Condition: TSI Signal Line
Timeframe: 1H

OR

Rule 3: Exit condition - TSI zero line recovery
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Cross Above
Second Condition: Value
Value: 0

Stop Loss Orders (SHORT)

Rule 1: Stop loss - TSI turns positive with momentum
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 5

AND

First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Greater Than
Second Condition: True Strength Index (25, 13)
Timeframe: 1H

OR

Rule 2: Stop loss - TSI signal line bullish breakout
First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Cross Above
Second Condition: TSI Signal Line
Timeframe: 1H

AND

First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 0

OR

Rule 3: Stop loss - Volume confirms bullish momentum
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

AND

First Condition: True Strength Index (25, 13)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 10

Advanced Strategy Combinations

TSI Signal Line Crossover Strategy

Bullish Setup

Setup:

• TSI below zero line (oversold territory)

• TSI crossing above signal line

• Volume increasing on crossover

• RSI confirming momentum shift

Entry: TSI signal line crossover with volume confirmation

Bearish Setup

TSI Divergence Strategy

Setup Process:

1. Identify price making new highs/lows

2. Check if TSI is making corresponding highs/lows

3. Divergence occurs when price and TSI move in opposite directions

4. Wait for TSI signal line crossover for confirmation

Execution:

• Base Order: TSI divergence + signal line crossover

• Additional: TSI momentum continuation in new direction

• Take Profit: Previous swing levels, TSI momentum exhaustion

• Stop Loss: TSI returns to previous extreme levels

Multi-Timeframe TSI Analysis

Setup

Higher Timeframe Momentum:

• Daily: TSI trend direction and major zero line position

• 4H: TSI signal line relationship and momentum direction

• 1H: TSI entry signals and crossover confirmation

Alignment Strategy:

• All timeframes showing consistent TSI momentum direction

• Higher timeframe TSI supporting lower timeframe signals

Execution

Risk Management Guidelines

Position Sizing

Strategy Type	Position Size	Conditions
LONG Strategy	Standard	TSI > 0 with volume
SHORT Strategy	Standard	TSI < 0 with volume
Signal Line Crossovers	Increased (125%)	Clear crossover with volume
Divergence Plays	Reduced (75%)	Wait for confirmation

TSI Reliability Factors

High Reliability

✅ Clear signal line crossovers ✅ Volume confirms TSI direction ✅ Multi-timeframe alignment ✅ TSI momentum acceleration ✅ Clear divergence patterns

Low Reliability

Best Practices

For LONG Strategies

1. Zero line importance - Focus on TSI crossing above zero for strongest signals

2. Signal line confirmation - Use TSI signal line crossovers for entry timing

3. Volume validation - Ensure momentum moves are backed by volume

4. Divergence analysis - Look for bullish divergence in negative TSI territory

For SHORT Strategies

1. Negative momentum - Focus on TSI crossing below zero for strongest signals

2. Signal line breakdown - Use TSI signal line crossovers for entry timing

3. Volume confirmation - Ensure selling pressure is backed by volume

4. Bearish divergence - Look for bearish divergence in positive TSI territory

Common Mistakes to Avoid

• Ignoring signal line - Trading TSI without signal line confirmation

• Wrong timeframe - Using TSI periods that don't match strategy timeframe

• No volume confirmation - Trading TSI signals without volume support

• Chasing extremes - Entering at extreme TSI values without confirmation

Market Conditions Analysis

Market Type	LONG Strategy Effectiveness	SHORT Strategy Effectiveness
Uptrend	🟢 High (momentum following)	🟡 Medium (counter-trend)
Downtrend	🟡 Medium (counter-trend)	🟢 High (momentum following)
Ranging	🟡 Medium (mean reversion)	🟡 Medium (mean reversion)
High Volatility	🟢 High (clear signals)	🟢 High (clear signals)
Low Volume	🔴 Low (wait for confirmation)	🔴 Low (wait for confirmation)

Related Indicators

Indicator	Relationship	Link
RSI	Momentum confirmation	RSI
MACD	Trend momentum	MACD
Stochastic	Overbought/oversold	Stochastic %K
Volume	Momentum confirmation	Volume

Conclusion

True Strength Index provides clean, double-smoothed momentum signals that filter out market noise while maintaining sensitivity to significant trend changes. Its signal line crossovers and zero line interactions make it an excellent tool for identifying sustainable momentum shifts.

Key Takeaways

• PRIMARY USE: Clean momentum direction identification with reduced false signals

• SECONDARY USE: Signal line crossovers for precise entry timing

• ALWAYS: Confirm with volume and use signal line for entry/exit timing

• DOUBLE SMOOTHING: Provides cleaner signals than single-smoothed oscillators

Success with True Strength Index requires understanding its double-smoothed nature and using it for identifying sustainable momentum changes rather than quick reversals. The signal line crossovers provide excellent entry and exit timing, while the zero line acts as a key reference for overall momentum direction.

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