TII_RLH
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The Trend Intensity Index (TII) is a technical analysis tool designed to measure the strength and direction of current market trends. By identifying how aggressively the price is moving relative to its average, it helps traders determine whether a trend is robust enough to be traded or if it is beginning to lose momentum.
Core Logic and Methodology
The indicator operates by comparing current market prices against a long-term moving average. It breaks down the price action into two primary components: positive movement (growth) and negative movement (decline).
1. Establishing the Baseline The tool first calculates a "Major" moving average based on a set period (typically 60 bars). This serves as the benchmark or the "fair value" of the asset over that timeframe.
2. Measuring Deviations Once the baseline is established, the script looks at a shorter "Minor" period (typically 30 bars) to see how the price has behaved relative to that baseline:
- Positive Deviations: Any time the closing price is higher than the moving average, the difference is captured and summed up.
- Negative Deviations: Any time the closing price is lower than the moving average, those differences are also captured and summed separately.
3. Calculating the Intensity Index The final TII value is a percentage (ranging from 0 to 100) derived from these two sums. It represents the proportion of total market "force" that is pushing in one direction versus the other.
How to Interpret the Results
The TII provides a clear visual cue regarding market sentiment:
- The 50% Neutral Line: This is the equilibrium point. When the index is at 50, the market is considered trend-neutral, meaning there is no dominant direction.
- Uptrend Signals (Above 50): As the value rises above 50, it indicates an upward trend. The closer the value moves toward 100, the stronger the bullish momentum becomes. For example, a reading of 80 suggests that 80% of the recent price deviations are moving upward.
- Downtrend Signals (Below 50): When the value falls below 50, it indicates a bearish trend. The closer the value drops toward 0, the stronger the downward momentum.
Practical Application for Traders
The primary goal of this logic is to identify "high-conviction" trends. The strategy suggested by this indicator is to enter a trade when the TII shows significant strength (moving far away from the 50% neutral line) and to remain in that position as long as the intensity holds. A drop in intensity or a reversal toward the center suggests the trend is weakening, signaling it may be time to exit the position and look for a move in the opposite direction.
//+------------------------------------------------------------------+
//| |
//| Copyright © 1999-2008, MetaQuotes Software Corp. |
//| http://www.metaquotes.ru |
//+------------------------------------------------------------------+
//+--------------------------------------------------------------------+
//| TII_RLH |
//| Copyright © 2006, Robert Hill |
//| http://www.metaquotes.net/ |
//| |
//| Based on the formula developed by M. H. PEE |
//| |
//| Trend Intensity Index. |
//| |
//| TII is used to indicate the strength of the current trend in the |
//| market. The stronger the current trend, the more likely the |
//| market will continue moving in the current direction. |
//| It is recommended to enter the market during a strong trend |
//| and ride it until TII shows signs of a reversal, at which time |
//| you should abandon your position and prepare to enter in the |
//| opposite direction. |
//| Pee recommends using a major period of 60 and a minor period of 30.|
//| Assuming these setting, TII is calculated as follows. |
//| The 60 bar simple moving average (MA) is computed. |
//| The deviation between the closing price and this computed average |
//| for each of the last 30 bars is computed (CL - MA). |
//| Positive deviations (CL > MA) are summed to give SDPOS. |
//| Negative deviations (CL < MA) are summed to give SDNEG. |
//| Then, the 30 period TII is calculated as: |
//| 100 * SDPOS / (SDPOS - SDNEG). |
//| TII ranges from a lower limit of 0 to an upper limit of 100 |
//| A TII value above 50 signals an uptrend |
//| A TII value of 80 means that 80% of the total deviations are up |
//| When TII fall below 50, a downtrend is likely in place |
//| 50 represents a level that is trend-neutral |
//| The closer TII is to 100, the stronger the current uptrend |
//| The closer TII is to 0, the stronger the current downtrend |
//| |
//+--------------------------------------------------------------------+
#property copyright "Copyright © 2006, Robert Hill "
#property link "http://www.metaquotes.net/"
//---- indicator settings
#property indicator_separate_window
#property indicator_buffers 1
#property indicator_color1 Red
#property indicator_width1 2
//----
extern int Major_Period=60;
extern int Major_MaMode=1; //0=sma, 1=ema, 2=smma, 3=lwma, 4=lsma
extern int Major_PriceMode=0;//0=close, 1=open, 2=high, 3=low, 4=median(high+low)/2, 5=typical(high+low+close)/3, 6=weighted(high+low+close+close)/4
extern int Minor_Period=30;
extern color LevelColor=Silver;
extern int BuyLevel=20;
extern int MidLevel=50;
extern int SellLevel=80;
//---- buffers
double ma[];
double ma_dev[];
double tii[];
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//---- drawing settings
IndicatorBuffers(3);
SetIndexStyle(0,DRAW_LINE);
SetIndexDrawBegin(0,Major_Period);
IndicatorDigits(MarketInfo(Symbol(),MODE_DIGITS)+2);
//---- 3 indicator buffers mapping
if(!SetIndexBuffer(0,tii) &&
!SetIndexBuffer(1,ma_dev) &&
!SetIndexBuffer(2,ma))
Print("cannot set indicator buffers!");
//---- name for DataWindow and indicator subwindow label
IndicatorShortName(" TII , Major_Period ( "+Major_Period+" ) , Minor_Period ( "+Minor_Period+" ), ");
SetLevelStyle(STYLE_DASH,1,LevelColor);
SetLevelValue(0,BuyLevel);
SetLevelValue(1,MidLevel);
SetLevelValue(2,SellLevel);
//---- initialization done
return(0);
}
//+------------------------------------------------------------------+
//| LSMA with PriceMode |
//| PrMode 0=close, 1=open, 2=high, 3=low, 4=median(high+low)/2, |
//| 5=typical(high+low+close)/3, 6=weighted(high+low+close+close)/4 |
//+------------------------------------------------------------------+
double LSMA(int Rperiod, int prMode, int shift)
{
int i;
double sum, pr;
int length;
double lengthvar;
double tmp;
double wt;
//----
length=Rperiod;
sum=0;
for(i=length; i>=1 ;i--)
{
lengthvar=length + 1;
lengthvar/=3;
tmp=0;
switch(prMode)
{
case 0: pr=Close[length-i+shift];break;
case 1: pr=Open[length-i+shift];break;
case 2: pr=High[length-i+shift];break;
case 3: pr=Low[length-i+shift];break;
case 4: pr=(High[length-i+shift] + Low[length-i+shift])/2;break;
case 5: pr=(High[length-i+shift] + Low[length-i+shift] + Close[length-i+shift])/3;break;
case 6: pr=(High[length-i+shift] + Low[length-i+shift] + Close[length-i+shift] + Close[length-i+shift])/4;break;
}
tmp =(i - lengthvar)*pr;
sum+=tmp;
}
wt=sum*6/(length*(length+1));
//----
return(wt);
}
//+------------------------------------------------------------------+
//| |
//+------------------------------------------------------------------+
int start()
{
int i,j, limit;
double sdPos, sdNeg;
int counted_bars=IndicatorCounted();
if(counted_bars>0) counted_bars--;
limit=Bars-counted_bars;
//----
for(i=limit; i>=0; i--)
{
if (Major_MaMode==4)
{
ma[i]=LSMA(Major_Period, Major_PriceMode, i);
}
else
{
ma[i]=iMA(NULL,0,Major_Period,0,Major_MaMode,Major_PriceMode,i);
}
ma_dev[i]=Close[i] - ma[i];
}
//========== COLOR CODING ===========================================
for(i=0; i <=limit; i++)
{
sdPos=0;
sdNeg=0;
for(j=i;j<i+Minor_Period;j++)
{
if (ma_dev[j]>=0) sdPos=sdPos + ma_dev[j];
if (ma_dev[j] < 0) sdNeg=sdNeg + ma_dev[j];
}
tii[i]=100 * sdPos/(sdPos - sdNeg);
}
//----
return(0);
}
//+------------------------------------------------------------------+
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