Expert Chaslau Koniukh
  • Companies
  • Global investment
  • Investors
  • Terminology
  • Economy
  • Stock Market
  • World exchanges
  • Tech and Marketing
True Strength Index and its advantages
Market terminology

True Strength Index: an overview of the oscillator’s features

09.07.2025
2 min read

How to use the True Strength Index in a trading strategy

The True Strength Index (TSI) is a tool used to evaluate the strength of a trend. It analyses market momentum and direction to identify potentially successful entry and exit points.
The indicator is based on two exponential moving averages, which smooth the data and reduce the influence of market noise. This improves the accuracy of the signals, making the TSI a useful tool for short-term and long-term trading strategies alike.
If the TSI is above zero, it is said to indicate a bull market trend. Below this level, the signal indicates bearish dominance. Another useful feature of the indicator is its ability to identify overbought and oversold trends. This information can be useful when studying the probability of a trend reversal.
TSI can help traders study impulses in the value of assets. This provides a solid foundation for developing a long-term trading strategy.
When the signal line crosses from the bottom to the top, it indicates the beginning of a bullish trend. In this case, traders start working with long positions. Conversely, when the line is crossed from top to bottom, they start selling assets. Generally, crossings indicate a sharp change in market dynamics. This increases the effectiveness of short-term strategies. By tracking the lines, you can adapt your actions to specific conditions.
However, it is important to take into account the possible divergence between the direction of price movement and the indicator itself. Such divergence may indicate a weakening of the current trend. But it is recommended that you use additional analytical tools to confirm these signals.True Strength Index

Advantages and disadvantages of True Strength Index

Like any other technical analysis tool, TSI has its strengths and weaknesses.
Advantages of the indicator:
– TSI demonstrates high accuracy when using a long-term trading approach.
– it takes into account not only the strength of the trend but also the power of the impulse during analysis.
– TSI is easy to use in combination with other technical analysis indicators and is integrated with various tools.
– it demonstrates high accuracy in the event of a strong trend.
– the index searches for entry and exit points thanks to the signal and centre lines.
As for the disadvantages, they are as follows:
– in conditions of market consolidation, there is a high risk of false signals.
– for each financial instrument, it is necessary to adjust the indicator for specific parameters;
– there is a probability of signal lag in the event of a trend reversal.
– low market volatility can reduce accuracy.
The risk of false signals increases during periods of low market activity. To avoid losses, experts recommend using the indicator alongside other tools. It is also significant to assess the market situation as a whole and monitor general sentiment and trends.

Tags: Market terminology
0
Previous Post A new financial centre in the Maldives is a step towards economic diversification

You Might Also Like

Trader's tools
Market terminology
Trader’s tools: peculiarities of the order book use
23.04.2021
Elliott Waves
Market terminology
Elliott Waves: an overview of the theory on the cyclicality of price structures
16.09.2022
stock exchange order
Market terminology
Why do you need a stock exchange order: types of documents?
14.12.2020
Bid and Ask
Market terminology
Bid and Ask: rules for using them to manage trades
08.09.2022
types of depository receipts
Market terminology
Types of depositary receipts: overview of instruments for acquiring shares
11.08.2021
Algorithmic trading
Market terminology
Algorithmic trading as a tool for stock market operations
27.06.2020

Popular Posts

  • Spain’s economy performs best in the EU
  • Li Ka Shing: How can success be achieved without money and education?
  • Skolkovo analysts: the Russian energy market is suffering losses
  • Ingeborg Mootz: a woman who became a stock player at the age of 75

Editor's Picks

Chaslau Koniukh
Analytics

American bankers from JPMorgan and Goldman Sachs advise to invest in gold: review by Chaslau Koniukh.

Press Secretary
17.08.2020
Expert Chaslau Koniukh
Analytics

Chaslau Koniukh on the analysts’ opinion on the key stake size change soon

Press Secretary
18.06.2020
expert Chaslau Koniukh
Analytics

Chaslau Koniukh: Internet trade market in Russia may reach 2.78 trillion rubles.

Press Secretary
30.05.2020
Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh
Analytics

Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh

Press Secretary
16.05.2020

Popular Posts

  • Spain’s economy performs best in the EU
  • Li Ka Shing: How can success be achieved without money and education?
  • Skolkovo analysts: the Russian energy market is suffering losses
  • Ingeborg Mootz: a woman who became a stock player at the age of 75
  • Analysts: Egypt’s economy to continue falling in 2023
Expert Chaslau Koniukh
  • Facebook
  • Twitter
  • Instagram

© 2024 CHASLAU KONIUKH. ALL RIGHTS RESERVED. Expert in marketing and project management, international investments, financial analyst.

Menu

  • Biography
  • Companies and corporations
  • Global investment
  • Investors and Entrepreneurs
  • Economy
  • Market terminology
  • Stock Market
  • World exchanges
  • Tech and Marketing
  • Analytics