Trade Gold Trading

True Strength Index Gold Analysis & TSI Trading Signals

True Trend Indicator

Created by William Blau

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

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

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

Trend Strength Indicator - How Do I Use True Strength Index (TSI) Indicator in Chart?

Analysis and Generating Signals

The TSI uses various different methods to generate trading signals. This trading indicator can be used in a similar way as the RSI to identify general and overall trend direction of the markets. Overbought and over-sold levels also can be displayed using TSI. The most common methods of generating signals are:

Zero line Trading Crossover ( Histogram XAUUSD crossover not Lines Gold crossover)

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

How Do I Place Trading True Strength Index (TSI) Indicator on Chart in XAUUSD Platform?

Gold Signal line Trading Crossover

  • A buy gets generated when the TSI line crosses above the Signal-line
  • A sell signal gets derived & generated when the 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 Trade

Divergence setup is used to look for potential trend reversal point of gold. Reversal divergence set-ups are:

Classic Trading Divergence

Gold Trade Classic Bullish Divergence: Lower lows in price & higher lows on the technical indicator

Gold Trade Classic Bearish Divergence: Higher highs in price & lower highs on the technical indicator

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

Hidden Divergence Setup

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

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

Over-bought/Oversold Levels on Trading Indicator

This can be used to identify overbought and oversold conditions in price action movements.

  • Over-bought condition - levels being higher than the +25 level
  • Oversold condition - levels being lesser than the -25 level

Trades can be generated/derived when TSI indicator crosses these technical levels.

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

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

Trend Strength Indicator - XAUUSD Trading True Strength Index (TSI) Trading Strategies

Over-sold - Buy Trade Signal

MetaTrader 4 TSI Technical Indicator - No Nonsense Trading True Strength Index (TSI) Indicator Described

Over-bought - Sell Trading Signal

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

Learn More Tutorials and Tutorials:

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Forex Traders Seminar

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