True Strength Index

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Strategy

Methodology

This strategy is backtested on daily OHLCV price data across major US equity indices and ETFs. Entry and exit signals are generated from the strategy's indicators with no lookahead bias — trades execute at the open of the bar following the signal.

Performance metrics are computed per symbol and shown individually. The parameter optimization section (where available) runs a grid search over the strategy's key parameters, optimizing for Sharpe ratio. Transaction costs and slippage are not modeled.

The signal logic and indicator code for this strategy is shown in the methodology code section below.

Methodology

True Strength Index double-smooths price momentum to reduce noise. Enters long when TSI crosses above its signal line, exits on the reverse. Values above zero indicate bullish momentum.

Implementation

class TSIStrategy(Strategy):
    long_n = 25
    short_n = 13
    signal_n = 7

    def init(self):
        tsi, signal = _tsi(self.data.Close, self.long_n, self.short_n, self.signal_n)
        self.tsi = self.I(lambda: tsi, name="TSI")
        self.signal = self.I(lambda: signal, name="Signal")

    def next(self):
        if crossover(self.tsi, self.signal) and not self.position:
            self.buy()
        elif crossover(self.signal, self.tsi) and self.position:
            self.position.close()

Performance metrics

Total return+11.888%
Net profit$118,885
Gross profit$662,989
Gross loss$566,060
CAGR+0.521%
Annualized return+0.521%
Monthly average return+0.087%
Median monthly return-1.413%
Best month return+5.205%
Worst month return-10.201%
Rolling 1-month return+11.914%
Return per trade+0.057
Log return CAGR+11.639%
Compounded vs simple return difference-13.242%

Equity curves

Chart for symbol:

Charts & distributions

2024-07 → 2026-04 · 5-year daily data

Equity curve vs ^GSPC — buy/sell signals

Strategy equityIndex (normalized)▲ Buy▼ Sell

35 trades · green dashes = buy entries · red dashes = sell exits

Drawdown (underwater)

Rolling 1-month Sharpe

Rolling 1-month return (%)

Period return (≈ monthly)

Return distribution (bar returns)

MAE vs MFE (trades)

Rolling 12m Beta

Rolling 12m correlation

Monthly returns (run)

Performance Matrix

Total return+34.201%
Net profit$342,010
Gross profit$708,440
Gross loss$375,210
CAGR+9.249%
Annualized return+9.249%
Monthly average return+0.766%
Median monthly return+1.903%
Best month return+4.311%
Worst month return-10.339%
Rolling 1-month return+12.491%
Return per trade+0.846
Log return CAGR-3.533%
Compounded vs simple return difference-35.618%