Trend Intensity Index

While looking at price vs MA shows direction, TII quantifies HOW CONSISTENTLY price stays above or below MA. A price above MA with TII of 55 is very different from TII of 85. TII measures trend persistence and strength, not just direction.

The standard is 60 periods (about 3 months on daily charts). Shorter MAs (40) make TII more reactive, longer MAs (80) make it smoother. Start with 60 and adjust based on your trading style - shorter for active trading, longer for position trading.

Not exactly. Unlike RSI, TII measures trend strength, not price extension. TII of 90 means a very strong trend, not necessarily an overbought price. However, extreme TII readings can indicate trend exhaustion and potential reversal points.

TII changes daily as the lookback window rolls forward. One day drops off and a new day is added. The change is usually gradual unless there's a sharp price move. Significant TII changes (>5 points per day) indicate strong momentum shifts.

No, TII at 50 means equal days above and below MA - no trend. The 40-60 neutral zone has no statistical edge. Wait for TII to break above 60 (bullish) or below 40 (bearish) before taking trend trades.

Bearish divergence: Price makes new high, TII makes lower high - trend weakening despite price gains. Bullish divergence: Price makes new low, TII makes higher low - selling exhaustion. Divergence is warning, not immediate signal - wait for price confirmation.

TII shows both direction AND strength (above/below 50), while ADX shows strength only (no direction). TII is simpler to calculate. ADX requires more computation. Both measure trend strength but TII also indicates bullish vs bearish bias.

Scale position size by TII strength. Example: TII > 80: 100% position, TII 70-80: 85%, TII 60-70: 70%, TII 50-60: skip or 50%. Stronger trends (higher TII) justify larger positions because follow-through probability is higher.

Not necessarily exit, but tighten stops. TII dropping from 85 to 70 means trend is weakening but still bullish. Watch for: 1) TII continuing to fall toward 60, 2) Divergence development, 3) Price breaking support. Exit if TII drops below 60.

TII for trend strength (direction), RSI for momentum (timing). Ideal long: TII > 60 (bullish trend) + RSI pullback to 40-50 (momentum reset). Avoid: TII > 60 but RSI > 70 (overbought). This combination improves win rate significantly.

Calculate ATR to measure volatility. When ATR is above 80th percentile (high volatility), extend MA to 80 and lookback to 40. When ATR is below 20th percentile, shorten to MA 40 and lookback 20. This maintains consistent signal quality.

TII ROC = Current TII - TII N days ago. Positive ROC means trend is strengthening. Negative ROC means trend is weakening. Extreme ROC (>10 or <-10) indicates rapid trend change. Use ROC as leading indicator for TII direction.

Calculate TII for universe daily. Rank by TII (highest for longs). Filter: TII > 70 AND ROC > 0 AND no bearish divergence. Score by: TII level (1-3), ROC sign (+1), divergence status (+1). Take top-scoring setups.

Testing shows TII divergence predicts reversals ~70-75% of the time. Bearish divergence is slightly more reliable (75%) than bullish (70%). Multiple divergences (double/triple) increase accuracy to 80%+. Always confirm with price action.

TII excels in trending markets (ADX > 25) with PF ~2.55. Performance drops in ranging markets (ADX < 20) with PF ~1.05. Monitor market regime and reduce TII-based trading when ADX is low or VIX is spiking.