The triple exponential average (TRIX) is a momentum indicator used by technical traders. It showsꦫ the percentage change in a moving average that has been smoothed exponentially three times. The TRIX has advantages over other trend-following indicators.

Long-time readers of Technical Analysis of Stocks and Commodities magazine may remember that Jack Hutson, the magazine's editor, first introduced TRIX to the technical community.

What Is TRIX?

The triple exponential average (TRIX) indicator is an 澳洲幸运5官方开奖结果体彩网:oscillator used to identify oversold and overbought markets, and it can also be used as a momentum indicator. Like many oscillators, TRIX oscillates around a zero line. When it is used as an oscillator, a positive value indicates an overbought market while a negative value indicates an oversold market. When TRIX is used as a momentum indicator, a positive value suggests momentum is increasing while a negative value suggests momentum is decreasing. Many analysts believe that when the TRIX crosses above the zero line it gives a 澳洲幸运5官方开奖结果体彩网:buy signal, and when it closes below the zero line, it gives a 澳洲幸运5官方开奖结果体彩网:sell signal. Also, 澳洲幸运5官方开奖结果体彩网:divergences between price and TRIX can indicate significant🧸 turning points in the market.

TRIX calculates a triple 澳洲幸运5官方开奖结果体彩网:exponential moving average of the log of the price input over the period of time specified by the length input for the current bar. The current bar's value is subtracted by the previous bar's🐻 value. This prevents cycles that are shorter than the period defined by length input from being considered by the indicator.

Advantages of TRIX

Two main advantages of TRIX over other trend-following indicators are its excellent filtration of market noise and its tendency to be a leading than 澳洲幸运5官方开奖结果体彩网:lagging indicator. It filters out market noise using the 澳洲幸运5官方开奖结果体彩网:triple exponential average calculation, thus eliminating minor short-term cycles that indicate a change in market direction. It has the ability to lead a market because it measures the difference between each bar's "smoothed" version of the price information. When interpreted as a 澳洲幸运5官方开奖结果体彩网:leading indicator, TRIX is best used in conjunction with another market-tim✤ing indicator—this minimizes false indic🌠ations.

Interpretation

On this chart of the 澳洲幸运5官方开奖结果体彩网:Dow Jones Industrial Average covering Sept 2001 to Sept 2002, you can see by the arrows that the TRIX indicator, from the high of Mar 2002 to the low watermark set in Jul 2002, was falling from a level of plus 40.45 to a minus 83.07. This example clearly shows that there is not any lag time between the DJIA tuning south and the TRIX indicator following this 澳洲幸运5官方开奖结果体彩网:price action. We have seen that the shorter the time frame, the ౠmore accurate the indicator will signal the move in the issue we are studying.

Using two moving averages offers an advantage: by watching the fast moving average cross over the slow moving average, the trader💝 can recognize the change in direction of price action. Using two differen✅t time spans for the TRIX is also an excellent timing technique.

In the 2001–2002 chart of the 澳洲幸运5官方开奖结果体彩网:S&P 500 Index above, the first highly visible move was the downturn of the market after the disasters of Sept 11. There was a subsequent rebound in the third week of September, with the 15-day moving average turning quicker than the 30-day moving average. But keep in mind that the confirmation from the 30-day indicator is more conservative, so it assures the average 澳洲幸运5官方开奖结果体彩网:buy-and-hold investor that the trend has truly turned. Look c👍losely at how well the turns in the 15-day mov💖ing average line up with the turns in the price action.

This idea of a 澳洲幸运5官方开奖结果体彩网:trendline violation in price can be looked at from another angle. Martin Pring, a ⛦well-known technician and author, noted this in♍ his writings:

"If a series such as the slow moving 30-day TRIX is 澳洲幸运5官方开奖结果体彩网:overbought but still rallying, then a trendline violation in the price will almost certainly lead or correspond with a peak in the TRIX. This is because a trendline violation signals a break in upside momentum. The penetration will be followed by either a decline or a temporary sideways move. In both cases this implies that the additional upside momentum required for an advancing TRIX is no longer available."

If you look closely at some of the other momentum indicators like a 澳洲幸运5官方开奖结果体彩网:stochastics or a 澳洲幸运5官方开奖结果体彩网:price ROC, you would find a similar pattern. TRIX is one of the best trend reversal and momentum indicators.