Introduction
TRIX is a momentum indicator that displays the percent
rateofchange of a triple exponentially smoothed moving average of the security's closing
price. It is designed to keep you in trends equal to or shorter than the number of periods
you specify.
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 the number of periods you specify).
Trades should be placed when the indicator changes
direction (i.e., buy when it turns up and sell when it turns down). You may want to plot a
9period 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, and sell when it falls below its signal.
Divergences between the security and the TRIX can also
help identify turning points.
The following chart shows an Analytical chart, its 12day
TRIX (purple line), and a 9day "signal" moving average of the TRIX (orange
line).
The TRIX indicator is calculated as follows:
 Calculate an nperiod exponential moving average of the
closing prices.
 Calculate an nperiod exponential moving average of the
moving average calculated in Step #1.
 Calculate an nperiod exponential moving average of the
moving average calculated in Step #2.
 Calculate the 1period (e.g., 1day) percent change of the
moving average calculated in Step #3.
