The abbreviation TRIX stands for "triple exponential". This is therefore an Exponential Moving Average, on which another Exponential Moving Average was calculated, with yet another Exponential Moving Average calculated on top. Moreover, an ROC is applied to this curve. The purpose of the threefold smoothing is to filter out non-significant price fluctuations.
As described above, a triple EMA is calculated; from this result the corresponding triple EMA of the previous day is subtracted and then the result is divided by yesterday's triple EMA. After this, the result is multiplied by 100.Formula
The adjustable period length can be chosen from 1 to 500. The parameters are those of the EMA. The observation period should be smaller than 20 days (weeks). The standard setting is 10.Interpretation
Like other MAs, the computed line indicates the prevailing trend in the underlying instrument. However, the TRIX reacts very sluggishly, and so an intersection with the center line cannot be interpreted as a trading signal. Instead, it is advisable to build an MA on the TRIX and to interpret the intersections of these two lines. If the TRIX rises above its MA, this is regarded as a buy signal, while the downwards crossing is a sell signal.
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