The true strength index (TSI) by William Blau2 is variation of the RSI (see Relative Strength Index) using two EMAs to smooth (see Exponential Moving Average), and a scale -100 to +100.
EMA of EMA of (close - prevclose) TSI = 100 * -------------------------------------------- EMA of EMA of abs(close - prevclose)
The TSI ranges from -100 up to +100 with positive values representing upward momentum and negative values downward momentum. Extreme values can be interpreted as overbought and oversold, as per the ordinary RSI.
The two EMA periods are parameters in Chart. If you set one of them to 1 then you get a plain RSI, though with a period by the usual reckoning whereas the RSI is in Wilder’s style (see Wilder EMA period), so for instance a TSI 27,1 is equivalent to an RSI 14.
See EMA of EMA for the effect of two EMAs. In general it leads to less weighting on the most recent data (the close-to-close differences in this case) than a single EMA.
See also CMO (see Chande Momentum Oscillator) using another different moving average for an RSI.
The True Strength Index, Technical Analysis of Stocks and Commodities magazine, November 1991, and Trading With the True Strength Index, May 1992.
Copyright 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2014, 2015, 2016, 2017 Kevin Ryde
Chart is free software; you can redistribute it and/or modify it under the terms of the GNU General Public License as published by the Free Software Foundation; either version 3, or (at your option) any later version.