TRIX - Triple Exponential Moving Average

The TRIple eXponential Moving Average (TRIX) is an oscillator introduced by Jack K. Hutson and published in the Technical Analysis of Stocks and Commodities Magazine.

The TRIX is based on the triple Exponential Moving Average of closing prices over the defined period. It calculates the percentage difference of this average over two consecutive days.

In principle, the TRIX eliminates cycles shorter than the chosen period. The triple smoothing reduces volatility and minimizes premature buy and sell signals.

The period of the TRIX must be chosen according to the trading cycle being studied.

The TRIX also includes a signal curve determined from its exponential moving average. Generally, the period of this average is 9 to eliminate false signals.

Example

Interpretation

The divergence between the TRIX and prices is an index of a probable reversal.

1. Buy signal: when the TRIX crosses above its signal curve and the TRIX is below zero.
2. Sell signal: when the TRIX crosses below its signal curve and the TRIX is above zero.