TSI Oil Technical Analysis and TSI Trading Signals
Oil Trading Trend Strength 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 crude oil price changes, making it a leading indicator that follows crude oil price action direction closely in the oil market.
The TSI is drawn as a blue line, the indicator also plots a signal line which is drawn as a red-line, & these 2 lines are used to generate cross over signals.
TSI also plots a histogram which shows the difference between the TSI Line and 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 crossover signal.
Crude Oil Trading Technical Analysis & Generating Trading Signals
The TSI uses various methods to generate crude oil signals. This oil indicator can be used in the same way as the RSI to determine general oil trend direction of the markets. Overbought and oversold levels can also be shown using TSI. The most common methods of generating trading signals are:
Zero line Crude Oil Trading Crossover (Histogram Crude Oil Trading crossover not Lines Oil Trading crossover )
- Buy - when the histogram crosses above the 0 a buy is generated
- Sell - when the histogram crosses below 0 a sell is generated
Oil Trading Signal line Crude Oil Trading Crossover
- A buy is generated when TSI line crosses above the Signal Line
- A sell is generated when TSI line crosses below Signal-line
This signal is the same as the one above & the timing corresponds to the time when the histogram crossovers happen.
Divergence Oil Trading
Divergence is used to look for potential oil trend reversal point of oil. The reversal divergence setups are:
Classic Crude Oil Trading Divergence
Oil Classic Bullish Divergence: Lower lows in crude oil price and higher lows on the indicator
Oil Classic Bearish Divergence: Higher highs in crude oil price and lower highs on the indicator
Divergence trading can also be used in identifying potential oil trend continuation points in crude oil price action direction. The continuation divergence trading setups are:
Hidden Oil Trading Divergence Setup
Oil Trading Hidden Bullish Divergence: higher lows in crude oil price and lower lows on the indicator
Oil Trading Hidden Bearish Divergence: lower highs in crude oil price and higher highs on the indicator
Oversold/Overbought Levels on Indicator
This can be used to identify overbought and oversold conditions in oil 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.
