# TRIX Indicator

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.

## Trading Signals

- Go
**long**when TRIX turns up below zero. - Go
**short**when TRIX turns down above zero.

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.

- Go
**long**on bullish divergences. - Go
**short**on bearish divergences.

##### Example

Intel Corporation is plotted with a 30-day exponential moving average (MA) and 30-day TRIX indicator and signal line.

Mouse over chart captions to display trading signals.

Compare the results of the TRIX oscillator to those of a single moving average system using the MA with closing price as a filter:

- Go long [L] when TRIX crosses to above the signal line while below zero.

Price closes above the MA 4 days earlier, but then whipsaws us in and out of several times at [W]. - Go short [S] when TRIX crosses to below the signal line while above zero.

By comparison the MA signal [X] is much later.

It is evident that TRIX can eliminate a number of whipsaws, with only marginal lag in the signal compared to faster indicators.

## Setup

See Indicator Panel for directions on how to set up an indicator.

The default TRIX window is 12 days. To alter the default settings - Edit Indicator Settings.

## Formula

The Trix indicator is calculated as follows:

- Decide on the number of periods (
*n*) to include in the indicator window, based on the time frame that you are trading. - EMA1:
**Calculate an***n-*period exponential moving average of closing price - EMA2:
**Calculate an***n-*period exponential moving average of EMA1 - EMA3:
**Calculate an***n-*period exponential moving average of EMA2 - Calculate TRIX:
**( EMA3 [today] - EMA3 [yesterday] ) / EMA3 [yesterday]**