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TRIX - Triple Exponential Smoothing Oscillator PDF Print E-mail

TRIX - Triple Exponential Smoothing Oscillator

As a momentum indicator, this oscillator is based on smoothed moving averages and their momentum to avoid insignificant daily price movements and to aid timing.

Overview

TRIX, developed by John Hutson, displays the percent rate-of-change of a triple exponentially smoothed moving average using an equity's closing price.

  • TRIX swings on an open scale around a zero line
  • A buy signal is generated by extreme negative levels
  • A sell signal is generated by extreme positive levels
  • Divergences between TRIX and the equity can aid in timing turning points.

Interpretation

  • TRIX is best used in conjunction with CCI or Parabolic SAR.
  • Depending on the number of periods chosen, TRIX keeps an investor in trends shorter than specified.

Signals

Similar to the use of the MACD indicator, a 9-period moving average of the TRIX can be used to create a signal line.

  • A buy signal is given when the TRIX rises above its signal line.
  • A sell signal is given when it falls below the signal line.

Also see MACD.