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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. |
