TRIX (Triple Exponential Average Oscillator)

What is TRIX?

TRIX, short for Triple Exponential Average Oscillator, is a momentum indicator that filters out market noise and identifies the direction and strength of a trend. It is based on the rate of change of a triple exponentially smoothed moving average. Developed by Jack Hutson in the 1980s, TRIX offers a smooth, lag-reduced view of price action — ideal for trend-following strategies.

How It Works

TRIX is calculated in a few stages:

1. Apply a single EMA (Exponential Moving Average) to the closing price.

2. Apply a second EMA to the result of the first EMA.

3. Apply a third EMA to the result of the second EMA.

4. Calculate the percentage rate of change between the current and previous values of the triple-smoothed EMA.

The final output is an oscillator that fluctuates above and below a zero line, indicating bullish or bearish momentum.

How to Read It

• Above Zero Line: Indicates an upward trend.

• Below Zero Line: Indicates a downward trend.

• Crossing Above Zero: Potential buy signal.

• Crossing Below Zero: Potential sell signal.

Best Settings

• Typical period: 18

• Settings may vary depending on your trading timeframe (shorter for intraday, longer for swing trading).

How to Use It in a Strategy

1. TRIX Zero Line Crossover

• Buy when TRIX crosses above 0

• Sell when TRIX crosses below 0

2. Combine with Trend Confirmation Tools

• Use with moving averages or price action to confirm trend direction

• Can act as a filter in breakout strategies

3. Divergence Detection

• Bullish divergence: Price makes lower lows, TRIX makes higher lows

• Bearish divergence: Price makes higher highs, TRIX makes lower highs

Common Mistakes

• Ignoring the Lag: Despite smoothing, TRIX can still lag in fast markets.

• Overtrading Crossovers: Frequent false signals in choppy or sideways markets.

• Using Alone: Best used with trend-confirming indicators or volume analysis.

• Setting Periods Too Low: Makes TRIX too sensitive, increasing noise.

Final Thoughts

TRIX is a versatile momentum indicator that excels in trending markets and filters out short-term noise effectively. Its triple-smoothing feature provides a cleaner view of momentum shifts, making it ideal for disciplined traders seeking higher-quality signals. When paired with other tools and used with proper risk management, TRIX can be a valuable addition to your trading arsenal.