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:
Apply a single EMA (Exponential Moving Average) to the closing price.
Apply a second EMA to the result of the first EMA.
Apply a third EMA to the result of the second EMA.
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.
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