Trend Intensity Index (TII) will tell you the intensity or strength of the market trend, in other words, this indicator tells you, the strength of the trend or in other words how strong the trend is.
The trend intensity index will give you the buying and selling signal. the good thing about this indicator is it shows less noises that why this is a very useful indicator.
The indicator mainly consists of 3 components.
- TII line.
- Signal line.
- And on the right side the values bar of TII Indicator.
TII and signal line both can move between 0 to 100 limit. above the 80 is Overbought zone and below the 20 level is the oversold zone.
Trend Intensity Index setting
- Period: The default Period of the TII indicator is 14. This means 14 Period share price will take to calculate the TII line.
- Field: the default field is ‘close’. This means the candlesticks closing price will take to calculate this indicator. Other field types also available. Like ‘open’ means Period opening price will take to calculate, ‘high’, ‘low’ prices. Etc etc.
- Signal period: this default period of the signal period is 9. This means to Calculate the signal line, a 9-period share price will take to calculate this Indicator.
- TII: This is the TII line color. by default it’s black.
- Signal Line: this is the signal line color. By default it’s RED.
- Show zones: this will show when the indicator lines will move above the Overbought and oversold zone.
- Overbought: this is the Overbought zone level. By default, it’s 80 means when the indicator line will move above the 80. This will show as an overbought zone.
- Oversold: this is the oversold zone level. By default oversold zone is 20. This means when the indicator line will move below the 20 level. This will show as an oversold zone.
What TII will tell you
The trend intensity name itself tells you that it will show you the trend intensity or strength.
it’s also tells you the trend direction.
- When the trend is bullish or bearish, this will show how strong the trend is.
- If the TII line is above the signal line, this indicates a bullish trend direction.
- If the Signal line is above the TII line, this Indicate a bearish trend direction
- When the indicatoe line is moving above the 80 level, this is the Overbought zone.
- When the indicator line is moving below the 20 level. This is the oversold zone.
- Above the 50 level is bullish side and below the 50 level is bearish side.
Trend Intensity Index Trading Strategy
- Buy Signal: When the black line (TII line) crossing the signal line (RED Line) and moving in an upward direction, At the crossing point you can buy the security. Exit: if the indicator line is moving above the Overbought zone. And if the Red line is Crossing the Black line. This is the exit point.
- Sell Signal: when the Signal line (RED Line) is crossing the Black Line. and moving in a downward direction. at the crossing point, you can short sell the security. Exit: if the lines is ij the oversold zone. And of the Black line is crossing the Red line. This is the exit point of the short sell call.
*Read related post for more information.