TRIX - Triple Exponential Average

TRIX is the momentum indicator that went to graduate school - it applies triple exponential smoothing to remove price noise while keeping the essence of the trend. Think of it as ROC with three layers of sophisticated filtering, designed to show you significant trends while ignoring minor price fluctuations. Its name comes from the "triple" smoothing process, not from any similarity to the breakfast cereal!

Origin and Sources

Creator: Jack Hutson introduced TRIX in the 1980s through articles in Technical Analysis of Stocks & Commodities magazine.

Historical Context: Developed to address the need for a momentum indicator that could ignore minor price movements while remaining sensitive to significant trends.

Fun Fact: Despite its complex calculation, TRIX was one of the first indicators specifically designed to be calculated by early personal computers, making it a pioneer in the computational technical analysis era.

Core Concept

Think of TRIX as a trend distillery - it takes price data and runs it through three rounds of exponential smoothing, then calculates the rate of change of the result. Like filtering water through multiple stages, each smoothing removes more noise, leaving you with purer trend signals. The final ROC calculation shows you how fast this purified trend is changing.

Pro Tip 🎯: Use the zero line as your trend filter - when TRIX is above zero, the filtered trend is up; below zero, it's down. But the most powerful signals often come from divergences with price.

Key Features

Triple Smoothing: Exceptional noise reduction
Momentum of Trend: Shows speed of trend changes
Zero Line: Clear trend direction reference
Signal Line: Additional confirmation through signal line crossovers

Real-World Application

When to Use

Trend Confirmation: Validate longer-term trend changes
Divergence Trading: Spot high-probability reversal setups
Filter: Screen out minor market movements
Entry/Exit Timing: Use zero-line or signal line crossovers

Common Pitfalls

Lag: Triple smoothing means significant delay
Whipsaws: Even with smoothing, ranging markets can produce false signals
Period Sensitivity: Different lookback periods can show conflicting signals
Over-filtering: Can miss important shorter-term moves

Complementary Indicators

Price Action: Use support/resistance with TRIX signals
Volume: Confirm trend changes with volume
Faster Indicators: Balance TRIX's lag with quicker signals
Volatility Indicators: Context for signal reliability

3.3 KiB Raw Blame History