Trend Intensity Index

While both oscillate 0-100 with 50 centerline, they measure different things. RSI measures the ratio of average gains to average losses - how strong up moves are vs down moves. TII counts how many closes are above vs below a moving average - how consistent the direction is. RSI can be overbought (>70) in an uptrend; TII would simply be high (>50-80) in an uptrend. They complement each other.

TII around 50 means the market is ranging - roughly equal closes above and below the MA. There's no clear trend. Options: (1) Wait for TII to move away from 50 before trading. (2) Use range-trading strategies if price is bouncing between support/resistance. (3) Look at other instruments with clearer trends.

Yes, in strong trends TII can remain at extreme levels for extended periods. This is actually good for trend-followers - it confirms the trend is strong. Don't automatically short because TII is 'high.' Instead, stay with the trend until TII starts falling from the extreme zone. Strong trends can last longer than you expect.

The default is typically 30 periods. This works well for most swing trading. If you day trade, consider shorter periods (14-20) for faster signals. If you position trade, consider longer periods (50-60) for smoother signals. Start with 30 and only change after testing on your specific instrument and timeframe.

TII is less common than RSI or MACD, so it may not be built into all platforms. Check your platform's indicator list. If not available, many platforms allow custom indicators - TII is simple to code. TradingView has community scripts for TII. If unavailable, similar concepts exist in ADX or Aroon indicators.

Compare price swings to TII swings. For bullish divergence: (1) Find two price lows where the second is lower. (2) Check if TII at the second low is higher than at the first. If price made lower low but TII made higher low = bullish divergence. For bearish divergence: Price higher high + TII lower high. Mark the swings clearly on your chart.

Generally no. Multi-timeframe analysis suggests trading only in the direction of the higher timeframe. If weekly TII is above 50 (bullish), only take long signals on daily. Counter-trend trades (daily short when weekly bullish) have lower win rates. Exception: At major reversal points with strong divergence signals.

Volume confirms TII signals. Strong signals: TII crosses 50 on above-average volume - institutions participating. Weak signals: TII crosses 50 on below-average volume - less conviction. Also, TII reaching extremes (>80, <20) on climax volume might indicate exhaustion rather than continuation.

In ranges, price oscillates above and below the MA without trending. TII crosses 50 frequently as closes flip-flop. Each cross looks like a signal but the range continues. Solutions: (1) Add ADX filter - only trade TII signals when ADX > 20 (trending). (2) Require TII to reach extreme (>60 or <40) not just cross 50. (3) Wait for price confirmation (breakout).

Several options work: (1) Exit when TII crosses back through 50 - simple, but may give back profits. (2) Exit when TII falls from extreme zone (from >80 to <70 for longs) - captures more of move. (3) Trail stop based on ATR or swing lows - lets winners run. (4) Fixed target based on support/resistance. Test which works best for your style.

Adaptive TII adjusts the lookback period based on market conditions. Example: Calculate base period (30), then multiply by adjustment factor. ADX-based: Period = 30 × (1 + (30 - ADX) / 30). When ADX is high (30), period stays at 30. When ADX is low (15), period increases to 45. Volatility-based: Period = 30 × (Current ATR / 20-day Average ATR). Code this as a custom indicator.

Key steps: (1) Define precise, coded rules (entry, exit, position sizing). (2) Test on long history (5+ years) covering different market conditions. (3) Use walk-forward analysis: optimize on one period, test on next, repeat. (4) Track metrics by market regime (trending/ranging). (5) Account for transaction costs and slippage. (6) Avoid over-optimization - simple rules often outperform complex ones out-of-sample.

Yes. Calculate TII for each sector ETF (XLK, XLF, XLE, etc.). Rank sectors by TII - highest TII = strongest bullish trend. Overweight top 3-4 sectors, underweight bottom 3-4. Rebalance weekly or when TII rankings change significantly. This systematically tilts the portfolio toward sectors with strongest trend intensity.

Effective features: TII level (raw value), TII slope (rate of change), TII distance from 50 (strength of bias), TII distance from extreme (80 or 20), higher timeframe TII, TII-price divergence flag, volume ratio at TII signals, ADX (trend strength), RSI (momentum). Train classifier to predict signal success. Walk-forward validate to prevent overfitting.

Professionals often use composite trend intensity measures combining multiple indicators (ADX, TII, Aroon, moving average slope). They apply these at multiple timeframes for regime classification. Position sizing often scales with trend intensity - larger positions in strong trends. Risk models reduce exposure when broad market trend intensity is low. Everything is backtested and validated rigorously before deployment.