Trix

Description

TRIX displays the percent rate-of-change of a triple exponentially smoothed moving average of the security's closing price.

It is the 1-period percent change of an x-period exponential moving average of an x-period exponential moving average of an x-period exponential moving average of the closing price.

An article on the TRIX indicator appears in Volume One of Technical Analysis of Stocks & Commodities magazine (TASC). The TRIX indicator presented in the TASC article uses a slightly different method to calculate the exponential moving averages and displays the 1-period change in "points multiplied by 1,000" (whereas MetaStock Pro displays the change as a percentage).

Interpretation

The TRIX indicator oscillates around a zero line.  Its triple exponential smoothing is designed to filter out "insignificant" cycles (i.e., those that are shorter than x-periods).

Trades should be placed when the indicator changes direction.  You also can plot a 9-period moving average of the TRIX to create a "signal" line (similar to the MACD indicator) and then buy when the TRIX rises above its signal line, and sell when it falls below its signal line.