Trend Intensity Index (TII) is an oscillator that measures the strength of the current trend for any financial instrument. It can be used independently or in conjunction with other trend-following indicators to accurately gauge the price movements during trending markets.
Developed by M.H Pee, TII oscillates between 0 to 100%. A value above 80% is an indicator of a strong bullish trend, while a value below 20% is an indicator of a strong bearish trend.
The indicator also consists of a signal line which is 9 periods exponential moving average of the TII line.
You can use this indicator in any timeframe.
Also Read: Know Sure Thing (KST) AFL Code
Below is the screenshot of the trend intensity index (TII) indicator plotted in an Amibroker chart. It is plotted as a white line over the candlestick chart.
Along with TII, a signal line is also plotted as a blue line.
Trend Intensity Index (TII) AFL Download
Download the AFL code of trend intensity index (TII) from the below link:
The calculation of Trend intensity index is a multi-step process as described below:
Step 1: Calculate the simple moving average of close price for ‘n’ periods. Call it SMA
Step 2: Find out the positive and negative deviation of the close price at each candle with respect of SMA calculated in the previous step
Dev = Close – SMA
If (Dev>0) then posDev=Dev, else negDev=abs(Dev)
Step 3: Calculate the sum of Positive and Negative deviations for the period twice smaller than the period used for SMA calculation
SDpos = sum(posDev, m);
SDneg = sum(negDev, m);
Here m = n/2 if n is even number and (n+1)/2 if n is odd number
Step 4: Calculate trend intensity index using the below formula
TII = 100 * (SDpos) / (SDpos + SDneg);
Step 5: Calculate signal line as a 9 periods exponential moving average of trend intensity index
TIISignal = EMA(TII, 9);
And then, TII and TIISignal are plotted on a candlestick chart by using the standard Amibroker “plot” function.
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Long and Short Rules
Here are the long and short rules you can consider while trading through TRIMA:
- If TII is above 80, it signifies strong
- If TII is below 20, it signifies strong downtrend
- If TII rises above 20, go long
- If TII goes below 80, go short
- If TII crosses above TIISignal, go long
- If TII crosses below TIISignal, go short
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