TRIX is an oscillator designed for trading trends. Select a TRIX indicator period appropriate to the time frame that you are trading. The indicator will keep you in trends that are shorter or equal to the window period.
Based on a triple-smoothed moving average of Closing price, the indicator eliminates cycles shorter than the selected indicator period. Triple smoothing reduces volatility and minimizes the chance of false signals shaking you out of a trend too early.
TRIX was developed by Jack Huton, publisher of (Technical Analysis of) Stocks and Commodities magazine.
Use a signal line (a 9 day exponential moving average of TRIX) to eliminate false signals. Wait for TRIX to cross the signal line before entering the trade.
Intel Corporation is plotted with a 30-day exponential moving average (MA) and 30-day TRIX indicator and signal line.
Compare the results of the TRIX oscillator to those of a single moving average system using the MA with closing price as a filter:
It is evident that TRIX can eliminate a number of whipsaws, with only marginal lag in the signal compared to faster indicators.