TII_RLH_v1

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TII_RLH_v1

Trend Intensity Index (TII) Logic Overview

The Trend Intensity Index (TII) is a technical analysis tool designed to measure the strength and direction of current market trends. Rather than simply showing you which way the price is moving, this script quantifies how "powerful" that movement is, helping traders identify whether they should stay in a trade or prepare for a potential reversal.

How the Logic Works

The script operates by analyzing the relationship between the current market price and its historical average over two specific timeframes: a Major Period (standardized at 60 bars) and a Minor Period (standardized at 30 bars).

To calculate the intensity, the tool follows these logical steps:

  1. Establishing a Baseline: The script first calculates a Simple Moving Average (SMA) based on the Major Period. This acts as the "equilibrium" line for the price.
  2. Measuring Deviations: It then looks at the last 30 bars (the Minor Period) and measures how far the closing price of each bar sits above or below that average baseline.
  3. Categorizing Movement: The script separates these deviations into two piles:
    • Positive Deviations: All instances where the price closed above the average.
    • Negative Deviations: All instances where the price closed below the average.
  4. Calculating Intensity: By totaling these positive and negative values and applying a specific mathematical formula, the script produces a final score ranging from 0 to 100.

Interpreting the Results

The resulting TII value provides a clear visual cue for market sentiment:

  • The 50 Level (Neutral Zone): This is the balancing point. When the TII is at 50, the market is considered trend-neutral, meaning there is no dominant bias in either direction.
  • Uptrend Strength (Above 50): Any value above 50 indicates an upward trend. The closer the number climbs toward 100, the stronger the upward momentum becomes. For example, a reading of 80 suggests that 80% of the total price movement over the observed period has been upward.
  • Downtrend Strength (Below 50): Any value below 50 indicates a downward trend. The closer the number drops toward 0, the stronger the selling pressure becomes.

Practical Application

The primary goal of this logic is to help traders "ride" a trend. By monitoring the TII, a trader can enter the market when the intensity shows a clear, strong bias and remain in the position as long as the intensity stays high. When the TII begins to move back toward the 50 level or shows signs of reversing direction, it serves as a signal that the current trend is losing steam, suggesting it may be time to exit the trade and prepare for an opposing move.

Indicators Used
Moving average indicator
Miscellaneous
Implements a curve of type %1
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TII_RLH_v1 
/*-----------------------------+
|			       |
| Shared by www.Aptrafx.com    |
|			       |
+------------------------------*/

//+--------------------------------------------------------------------+
//|                                                   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 Minor_Period = 30;

//---- 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("+Minor_Period+")");
//---- initialization done
   return(0);
  }

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--)
   {
       ma[i] = iMA(NULL,0,Major_Period,0,MODE_SMA,PRICE_CLOSE,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+30;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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