True Strength Index CFD Technical Analysis and TSI CFD Signals

True CFD Trend Indicator

Developed by William Blau

TSI is a momentum indicator. The TSI is drawn by using a momentum calculation that reacts faster and is more responsive to cfd price changes, making it a leading indicator that follows cfd price action direction closely in the cfd trading market.

The TSI is drawn as a blue line, the indicator also plots a signal line which is drawn as a redline, and these 2 lines are used to generate cross over signals.

TSI also plots a histogram which shows the difference between the TSI Line and the Signal-line. This histogram crosses above or below the center lines, histogram levels above the center line shows a bullish crossover signal, while center line levels below the center-line shows a bearish cross-over signal.

CFD Technical Analysis & Generating CFDs Signals

The TSI uses various methods to generate cfd signals. This cfd indicator can be used in the same way as the RSI to determine general cfd trend direction of the markets. Overbought and oversold levels can also be shown using TSI. The most common methods of generating trading signals are:

Zero line CFD Trading Crossover (Histogram CFD Trading crossover not Lines CFDs Trading crossover )

• Buy - when the histogram crosses above 0 a buy is generated
• Sell - when the histogram crosses below the 0 a sell is generated

CFDs Trading Signal line CFD Trading Crossover

• A buy is generated when TSI line crosses above Signal Line
• A sell is generated when TSI line crosses below the Signal Line

This signal is the same as the one above & the timing corresponds to the time when the histogram cross-overs happen.

Divergence CFDs

Divergence is used to look for potential cfd trend reversal point of a cfd. The reversal divergence setups are:

Classic CFD Trading Divergence

CFD Classic Bullish Divergence: Lower lows in cfd price and higher lows on the indicator

CFD Classic Bearish Divergence: Higher highs in cfd price and lower highs on the indicator

Divergence trading can also be used in identifying potential cfd trend continuation points in cfd price action direction. The continuation divergence trading setups are:

Hidden CFDs Trading Divergence Setup

CFD Hidden Bullish Divergence: higher lows in cfd price and lower lows on the indicator

CFD Hidden Bearish Divergence: lower highs in cfd price and higher highs on the indicator

Overbought/Oversold Levels on Technical Indicator

This can be used to identify overbought & over-sold conditions in cfd price action movements.

• Overbought condition - levels being greater than the +25 level
• Oversold condition - levels being less than the -25 level

Trades can be generated when TSI crosses these levels.

Buy signal - when the areas cross above -25 level a buy is generated.

Sell signal - when the levels cross below +25 level a sell is generated.

Oversold - Buy CFD Signal

Overbought - Sell CFD Signal

The overbought/oversold levels are indicated using horizontal lines drawn at the +25 & -25 levels.