TSI Technical Analysis & TSI Signals

TSI 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 trading price changes, making it a leading indicator that follows price action direction closely in the market.

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

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

Gold Analysis & Generating Signals

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

Zero line Gold Cross Over (Histogram crossover not Lines XAUUSD Trading crossover )

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

Trading Signal line Crossover

• A buy is generated when TSI line crosses above the 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 XAUUSD

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

Classic Divergence

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

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

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

Hidden XAUUSD Trading Divergence Setup

XAUUSD Hidden Bullish Divergence: higher lows in price & lower lows on the indicator

XAUUSD Hidden Bearish Divergence: lower highs in price & higher highs on the indicator

Oversold/Overbought Levels on Indicator

This can be used to identify overbought and oversold conditions in 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 the TSI crosses these levels.

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

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

Oversold

Overbought

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