Triple Exponential Average(TRIX): How to analyze the market using triple exponential average

By QuintoTrader | Quinto Trader | 13 Sep 2019


Triple Exponential Average tool indicator was developed by Jack Hutson as an oscillator for the overbought/oversold market condition. The tool can also be used as a momentum indicator.

Therefore, Triple Exponential Average is an indicator that combines market trend with momentum.

It constitutes the triple smoothed moving average and the period percentage change.

The triple smoothed moving average covers the trend while the period percentage change measures momentum.

TRIX is calculated using the following;

-15period exponential moving average (EMA) using the closing price

-15period exponential moving average(EMA) using the first step above

-15 period EMA using the second step above

-1period percentage change from the third step above

The last formula is mostly considered as the TRIX formula and will mostly fluctuate from time to time.

 

The triple exponential average indicator normally oscillates at around zero.

Since this indicator oscillates at 0 it therefore follows that when TRIX is below 0.0 especially when it is moving lower, then the trend will be considered as a downward trend thus the trader should close any buy position and enter a sell position while when TRIX is above 0.0 especially when it is moving higher, then the trend will be considered as an upward trend thus the trader should close any sell position and enter a buy position. This is indicated in the candlestick chart below;

 

MetaTrader%2BWeb%2BTerminal.png

From the candlestick chart above, the red arrow has indicated several oscillations for the TRIX indicator, that is;

-TRIX oscillation point at 0

-TRIX indicator curve

-TRIX oscillate below 0

- TRIX oscillate above 0

From the candlestick chart, when the Trix indicator oscillates above 0, it signals the trader that the market is becoming oversold thus the market trend is moving upward thus the trader will be able to close any sell position and open a buy position while when Trix indicator oscillates below 0, it signals the trader that the market is becoming overbought thus the market trend is moving downward thus the trader will be able to close any buy position and open a sell position.


Recommendation: If you are day trader, use 1min,5min,15min, and 30 min timeframe while if you are a swing trader, just use 1hour and above timeframe if you want Triple Exponential Average indicator to work well for you.

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QuintoTrader
QuintoTrader

Trader, Blockchain Technologist and Contentpreneur. Also founder and CEO @ Quinto Trader


Quinto Trader
Quinto Trader

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