The True Strength Index & Descending Triangle: The Ultimate Trading Cheat Code

Why Most Traders Overlook These Powerful Tools (And Why You Shouldn’t)

Imagine this: you’ve spent hours analyzing the market, setting up your trade, and then—bam!—the price moves against you like an unexpected plot twist in a bad sitcom. If that sounds familiar, you’re not alone. Many traders rely on surface-level indicators but overlook the True Strength Index (TSI) and Descending Triangle, two powerhouse tools that can transform your trading game.

The True Strength Index (TSI) helps traders gauge momentum with a precision that makes traditional indicators look like they belong in a museum. Meanwhile, the Descending Triangle is a chart pattern that signals market continuation or breakdown with the subtlety of a whispered stock tip from an insider. Used together, they can create an elite trading strategy that leaves the masses clueless.

The Hidden Formula That Smart Traders Use

Let’s break it down: why are the True Strength Index and Descending Triangle a match made in Forex heaven?

1. What is the True Strength Index (TSI), and Why Should You Care?

The TSI is like the RSI’s smarter, more disciplined cousin. While RSI gets overly excited and throws out false signals, TSI calculates double-smoothed momentum for a more reliable view of trend strength.

• Measures trend strength by filtering out price noise.
• Reduces false signals by applying a double smoothing process.
• Helps traders pinpoint momentum shifts before price action confirms.

How It Works:

• When TSI crosses above zero, it signals bullish momentum.
• When TSI crosses below zero, it signals bearish momentum.
• Divergences between TSI and price can be early indicators of reversals.

Example: If EUR/USD is forming higher highs but TSI is making lower highs, a reversal is likely on the horizon. This is what separates the elite traders from the hopeful ones.

2. The Descending Triangle: Your Secret Weapon for Breakout Trades

The Descending Triangle is the ultimate breakout formation that institutions love. It’s identified by a flat support level and a descending resistance line, signaling that selling pressure is growing stronger than buying pressure.

How to Spot It:

• Flat bottom support: A price floor that has been tested multiple times.
• Lower highs: Each bounce off resistance is weaker than the last.
• Breakout point: When price finally breaches support, it often leads to a rapid move down.

How Smart Traders Use It:

• Entry: Enter a short position as soon as price breaks below support.
• Stop-loss: Place a stop just above the last lower high to avoid premature stop-outs.
• Profit Target: Measure the height of the triangle and project it downward for your profit target.

3. The Killer Combo: TSI + Descending Triangle for Precision Entries

Most traders either use chart patterns or indicators—but pros know the real money is in combining them. Here’s how to merge TSI and the Descending Triangle for high-probability trades.

Winning Strategy:

1. Identify a Descending Triangle: Wait for the price to approach support.
2. Check TSI: Ensure TSI is confirming bearish momentum by trending below zero.
3. Look for a Breakout: Once price breaks below support, execute a short trade.
4. Confirm the Move: If TSI moves further negative after the breakout, it’s a strong confirmation.
5. Set a Stop & Target: Place stops just above the last lower high and target the projected move.

4. Real-World Example: GBP/USD Breakdown Using This Strategy

Let’s analyze a past trade using this method. Suppose GBP/USD is forming a Descending Triangle at 1.2800 support.

• TSI is at -15, confirming bearish momentum.
• Price breaks below 1.2800 with increased volume.
• After entry, price drops 50 pips before retracing.
• Exit strategy: When TSI crosses back above -10, signaling momentum exhaustion.

The Common Pitfalls That Wipe Out Most Traders

Even with this powerful setup, traders often make critical mistakes. Here’s how to avoid them:

???? Ignoring Volume Confirmation: If the breakout happens on low volume, it’s a fakeout waiting to happen.

???? Jumping in Too Early: Wait for a candle close below support before entering.

???? Forgetting the Stop-Loss: Even the best setups fail sometimes. Protect your capital!

Final Thoughts: Trade Like the Pros

Most traders rely on the same basic tools, which is why most traders fail. By combining the True Strength Index with the Descending Triangle, you get an edge that’s backed by momentum confirmation and breakout patterns.

Want to level up even further? Access real-time market insights, pro-level Forex strategies, and exclusive trading tools by joining the StarseedFX community.

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Image Credits: Cover image at the top is AI-generated