Trend Intensity Indexr

About Trend Intensity Index

The Trend Intensity Index (TII) is used to define strong trends. Technical analysis theory states that long trade could be traded when TII readings are above 80% (buy when TII moves above 80% and close when it drops back below 80%) and short trade could be traded when readings are below 20% (buy when TII drops below 20% and close when it raises back above 20%).

The Trend intensity Index belong to the RSI (Relative Strength Index) group of indicators. The TII is actually modified RSI. The only difference between TII and RSI is that instead of positive and negative price changes, the Trend Intensity Index uses positive and negative deviation from the average price (from Simple Moving Average).

Because the Trend Intensity Index use SMA to define price changes, it is much smother hen compared to the RSI. If you like RSI, you will love this indicator. It is analyzed and traded in the dame way as the Relative Strength Index is. On the stock chart below you may see the examples of using the TII to generate trading signals in similar to the RSI way (in addition to the way described above):

1. On the crossovers of the TII and 50% line around which TII oscillates


2. On the crossovers of the TII and its Signal line (EMA applied to the TII):