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Triple Exponential Average

Type

Trend indicator

Short introduction

The Trix was developed by Jack K. Hutson and corresponds to a Rate of Change (ROC ) of a triple smoothed Exponential Moving Average.

Statement

The triple smoothing really eliminates all non-significant "price outliers" from the chart's course. First an exponential MA is formed by an exponential MA by an exponential MA, thus a triple exponential MA. Normally, a one-day ROC is calculated for this course.

Formula/calculation

Tt = EMAt (EMAt (EMAt (log(Close))))

where the first EMA applies:

EMA1t = a x log(Closet) + (1-a) x EMAt-1

The TRIX itself is the percentage rate of change of the 3-fold exponentially smoothed moving average (Tt):

TRIXt = 100 × ( Tt – Tt-1 ) ÷ Tt-1

Interpretation

The course of TRIX shows, just like a MA, the current trend in the underlying. Because the indicator reacts very slowly due to the multiple smoothing, it is not recommended to use the crossing of the zero line as a signal generator. It makes more sense to lay a MA over the actual TRIX again and to interpret the crossings as signals.

A buy signal is given when the TRIX indicator crosses its MA from bottom to top, a sell signal when the indicator crosses its MA from top to bottom.

Default setting

  • There is no unique standard, but often quite short periods of max. 15 days are used for the MA of TRIX. In the literature, always a one-day ROC is used.
  • For signal generation, a 5- or 9-day MA is often used.

Example: TRIX

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