Sunday, 9 May 2021

Triple Exponential Average (TRIX)

 

Triple Exponential Average (TRIX)



·       TRIX is an Oscillator: Oscillates around zero

o   Overbought if it is above zero - I do not like this definition!

o   Oversold when it is below zero - I do not like this definition!

·       When TRIX is used as a momentum indicator

o   Positive value means the momentum is increasing.

o   Below zero line suggests the momentum decreasing.

·       When TRIX is used as a trend indicator

o   More time staying above the zero means uptrend.

o   More time below the zero line means downtrend.

·       Signals

o   Many analysts believe that when the TRIX crosses above the zero line it gives a buy signal, and when it closes below the zero line, it gives a sell signal.

o   I prefer combining TRIX with a moving average with smaller time period

§  Buy only if in an uptrend and you see the TRIX crosses above MA

§  Sell only if in a downtrend and you see the MA crosses above TRIX

·       Divergence

o   A divergences between price and TRIX can indicate significant turning points in the market.

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