Direct Answer
Commonly defined as the proportion of recent price deviations from a moving average that are positive, expressed on a 0 to 100 scale. It tests how consistently price has stayed on one side of its average. Values near 100 mean price has stayed above its average with large deviations, and values near 0 the reverse.
Trend Intensity Index: Formula, Meaning, Signals, Examples and How to Use It
How Is Trend Intensity Index Calculated?
Commonly defined as the proportion of recent price deviations from a moving average that are positive, expressed on a 0 to 100 scale. It tests how consistently price has stayed on one side of its average.
Formula: TII = 100 * SDpos / (SDpos + SDneg), where SDpos and SDneg sum the positive and negative deviations of price from its moving average over a recent window
Inputs:
- Closing prices
- Moving average period (such as 60)
- Deviation window (such as 30)
Worked example. If positive deviations sum to 18 and negative deviations to 6, the Trend Intensity Index is 75.0. The inputs are illustrative numbers, not market data.
Reading it. Values near 100 mean price has stayed above its average with large deviations, and values near 0 the reverse. Readings near 50 mean deviations are balanced, consistent with no trend. Threshold levels such as 80 and 20 are sometimes used.
Limits. Definitions and window lengths vary, so values differ between platforms. It lags because it depends on a long moving average.
What is Trend Intensity Index?
Commonly defined as the proportion of recent price deviations from a moving average that are positive, expressed on a 0 to 100 scale. It tests how consistently price has stayed on one side of its average.
How to use Trend Intensity Index
Values near 100 mean price has stayed above its average with large deviations, and values near 0 the reverse. Readings near 50 mean deviations are balanced, consistent with no trend. Threshold levels such as 80 and 20 are sometimes used. A reading alone is never a buy or sell signal; it needs context from price structure, volume, volatility and the broader market regime.
Strengths
- Splitting deviations into positive and negative sums gives a share bounded between 0 and 100, so the scale is fixed.
- Because the measure uses deviations from an average, it weights how far price sat above or below, not merely how many bars did.
- Reproducible when the formula and data convention are fixed.
Weaknesses and limitations
- One large positive deviation can lift the sum for the whole window, so the reading can stay high after a single spike.
- A sideways market that hovers near the average gives values around 50 regardless of volatility, so quiet and wild ranges look alike.
- Correlated indicators can create false confidence by repeating the same underlying information.
Editorial and risk note
This page is educational content, not individualized investment advice. It should not imply guaranteed prediction, accuracy or outperformance.
Frequently Asked Questions
Is Trend Intensity Index a buy or sell signal?
No. Values near 100 mean price has stayed above its average with large deviations, and values near 0 the reverse. Definitions and window lengths vary, so values differ between platforms. A trade built on it still needs a trigger, an invalidation rule, a position size and realistic execution assumptions.
What is the best setting for Trend Intensity Index?
Trend Intensity Index takes these inputs: closing prices; moving average period (such as 60); deviation window (such as 30). There is no universal best setting for the tunable ones, so test them across instruments, regimes and out-of-sample periods and favor stable parameter regions over one historical winner.
Can Trend Intensity Index be used by itself?
Definitions and window lengths vary, so values differ between platforms. It lags because it depends on a long moving average. For that reason it is read next to measures of direction, participation, valuation, liquidity and risk, not alone.
Does Trend Intensity Index work on every timeframe?
The calculation (TII = 100 * SDpos / (SDpos + SDneg), where SDpos and SDneg sum the positive and negative deviations of price from its moving average over a recent window) can be run on any bar size, but behavior is not portable: a reading on a five-minute chart describes a very different market window from the same reading on a daily chart. Validate the exact timeframe before relying on it.
Why does Trend Intensity Index give false signals?
One large positive deviation can lift the sum for the whole window, so the reading can stay high after a single spike. A sideways market that hovers near the average gives values around 50 regardless of volatility, so quiet and wild ranges look alike. Lag, noise and regime changes add to this, because market participants react to new information after the reading is calculated.
How should Trend Intensity Index be backtested?
Rebuild Trend Intensity Index from closing prices using point-in-time data, write the rules before testing, include delisted securities where relevant, model realistic fills and costs, reserve a validation sample and compare with a simpler baseline.