TRIX - Indicator Formula

The triple exponential moving average was developed by Jack Hutson in the early 1980s. The Trix is a momentum indicator used in technical analysis that shows the percentage change in a triple exponentially smoothed moving average. The Trix is designed to filter out price movements that are considered to be irrelevant to the charts. Some traders use it similarly to the moving average convergence divergence, commonly called the MACD.

The Trix can be used to identify oversold and overbought markets as well as being used as a momentum indicator.

When the Trix is above the Zero-Line, or positive, this represents a bullish opportunity.

When the Trix is below the Zero-Line, or negative, this represents a bearish opportunity.

Calculation:

First, the Exponential Moving Average of a price is derived from the expression

EMA1( t ) = EMA( Price( t ), N, 1 )

where:

Price( t ) = Current price

EMA1( t ) = The current value of the Exponential Moving Average

Followed by the second smoothing of the obtained average is executed - double exponential smoothing

EMA2( t ) = EMA( EMA1( t ), N, t )

The double Exponential Moving Average is smoothed exponentially one more time - hence, the Triple Exponential Moving Average

EMA3( t ) = EMA( EMA2( t ), N, t )

Now the indicator itself is found with

TRIX( t ) = EMA3( t ) - EMA3( t - 1 ) / EMA3( t - 1 ) * 100

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