Day Trading Online Home Page  

The TRIX is a triple EMA of a stock's closing price, and as such is a momentum indicator showing the rate of change of price as a percentage. The main use of the TRIX is to keep you in trends of equal or shorter duration to the specified period of the TRIX (i.e. the period used to calculate the EMAs). Oscillating around a zero line, the triple EMA of the TRIX is designed to smooth out wobbles that would otherwise affect price. Most traders open a position when the TRIX changes direction (buing when it turns up and selling when it turns down).

Some even plot a 9 period moving average of the TRIX itself creating a "signal" line as in the MACD indicator - buying if the TRIX breaks up thru the signal line or selling if it falls down thru the signal line. Another popular use is to look for divergences between the TRIX and price, and trade these. Day trading traders have little use for the TRIX, as it is more of a 'swing trading' technical indicator.

To calculate the TRIX, first calculate an EMA of your chosen period (e.g. 20 days) of the closing price. Next, calculate an EMA of the moving average calculated in in the first step of the same period. Then, calculate the EMA of the moving average calculated in the second step. Finally, calculate the 1 period (e.g., a single day) percentage change of the moving average calculated in the third step.

previous next