Trend Intensity Index

Technical Systems Intermediate Canada XIU XIC ZSP SPY QQQ Individual Stocks Futures Forex

Identifies trend strength and potential reversals

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Quick Reference

Strategy Type Trend Strength Measurement System
Market Outlook Identifies trend strength and potential reversals
Risk Profile Defined by TII extremes and reversals; typically 2-3% per trade
Reward Profile Captures trends when strong; avoids choppy markets
Time Horizon Swing to position trading (days to weeks)
Best Conditions Markets transitioning between trending and ranging phases
Indicator Basis Measures percentage of closes in trend direction over lookback period

Canada Market Details

Primary Instruments XIU, XIC (index ETFs); Major banks (RY, TD, BMO); ZSP (S&P 500)
Trading Hours 9:30 AM - 4:00 PM ET
Settlement T+1 for stocks and ETFs
Tax Treatment Capital gains 50% inclusion rate
Tfsa Eligibility YES - Stock/ETF trading permitted
Rrsp Eligibility YES - Stock/ETF trading permitted
Commission Consideration Moderate frequency trading; commission impact manageable
Currency Note Consider CAD/USD exposure for US-listed instruments
Liquidity Note Works well with liquid Canadian securities

Frequently Asked Questions

What's the difference between TII and ADX?

TII measures trend direction and consistency (% of closes in trend direction), ranging from 0-100 with 50 as neutral. ADX measures only trend strength, not direction, with 20-25 as the threshold for trending. TII tells you which way and how strong; ADX tells you only how strong.

What MA period should I use for TII?

Standard is 60-day SMA with 30-day lookback. For shorter-term trading, try 30-day MA with 14-day lookback. For longer-term, use 100-200 day MA with 50-60 day lookback.

Can I use TII for day trading?

Yes, but adjust parameters. Use shorter MA (20-30 period) and lookback (10-14 periods) on hourly or 4-hour charts. Be aware TII may be noisier intraday.

Is TII suitable for TFSA trading?

Yes, TII is excellent for TFSA trading. Its trend-following nature typically involves holding positions for days to weeks, which suits registered account trading well.

Why is my TII stuck near 50?

TII near 50 indicates the market is in a range with roughly equal closes above and below the MA. This is the neutral zone - wait for TII to break above 60 or below 40 before trend trading.

How do I trade TII divergences?

Identify divergence (price lower lows + TII higher lows for bullish). Don't trade immediately - wait for TII to actually turn up and cross a threshold (like above 30 or 40). Set stop below divergence low. Patience is key.

Should I exit when TII drops from 80 to 60?

This is a warning signal - the strong trend is weakening. Options: exit fully, take partial profits, or tighten stops. The best choice depends on your risk tolerance and whether weekly TII is still strong.

How do I combine TII with moving averages?

Use the same MA for both TII calculation and as price support. When TII > 60 and price pulls back to the MA, it's a potential buying opportunity. Exit if TII drops below 50 or price closes below MA.

What's the best way to use TII as a filter?

Only take buy signals from other indicators when TII > 50 (preferably > 60). Only take sell signals when TII < 50 (preferably < 40). This filters out many false signals in non-trending markets.

How long should I wait for TII to confirm a breakout?

Ideally, TII should be rising and above 50 before the breakout, or cross above 60 within 2-3 days after. If TII doesn't confirm within a week, the breakout may be false.

How do I build a TII scanner?

Scan for: TII crossed above 50 in last 2 bars, price above MA, volume above average. Rank by TII level (higher = stronger trend), TII direction (rising preferred), and weekly alignment. Most platforms require custom scripting.

How do I adapt TII to different market regimes?

In trending regimes (TII frequently at extremes), use standard 20/80 thresholds. In choppy regimes (TII mostly 40-60), use tighter 30/70 thresholds for signals. Also consider longer lookback periods in volatile markets.

Can I use TII for portfolio-level risk management?

Yes. Track TII for all holdings and create a heat map. If most positions have TII > 60, maintain full investment. If TII is mixed, reduce exposure. If most have TII < 50, go defensive with higher cash.

How do I measure TII 'persistence'?

Track consecutive days TII stays in a zone. Extended periods at extremes (>80 for 20+ days) suggest strong trends but watch for exhaustion. Brief touches suggest weak attempts. This adds timing context.

What's the typical win rate for TII systems?

Well-designed TII systems typically achieve 50-55% win rates. The edge comes from trading only in strong trends (TII > 60) and avoiding neutral zones, which improves the average winner vs loser ratio.

Related Strategies

ADX
Aroon
RSI
RSI
MACD
Moving Averages

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