TRIX Indicator

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The Trix indicator is nothing more than a triple exponential moving average indicator. Whilst simple in its basis the actual calculation is quite clever as it “the log of the price input over the period of time specified by the length input for the current bar. The current bar’s value is subtracted by the previous bar’s value. This prevents cycles that are shorter than the period defined by length input from being considered by the indicator” (Investopedia 2010).

TRIX oscillates around a zero line so like most oscillating indicators a positive value indicates an overbought market and a negative value indicates an oversold market. Thus whenthe TRIX crosses above the zero line it gives a buy signal, and when it closes below the zero line, it gives a sell signal.

You can also use divergences between price and TRIX to make your trading decisions. As you can see in the chart below you can apply a signal line to the TRIX indicator for metatrader. This will also allow you to use crossovers of the two lines and entries or exits.

As always though but applying a signal line to an indicator you start to “create” signals where signals may not really be there. Naturally it will be up to the individual if they want to use a signal line but sometimes it can be over kill. Filtering a filter ultimately can make you see things that are just not there.

Further, the TRIX indicator is considered to be one of the more leading indicators and by applying an average of an average you are pretty much slowing it down to become more lagging. But as always it is up to the individual trader. If you don’t want to use a signal just set the signal line to 1 in the MT4 properties of the TRIX indicator.

This indicator has been used as a forex indicator more recently but I have seen it used on US indicies (like the Russell or E-mini and Dow contracts) more in my time on forex forums. But again with all these indicators you can use them how you wish.


There are also various other T3 indicators to download on GTS:- T3 Metatrader Downloads and T3 NinjaTrader Downloads

2 Responses

  1. james wilson says:

    I do not like this indicator because it has no historgram like the MACD. I really don’t see a reason to use a lagging indicator as a leading indicator. There are no perfect indicators, formulas can not replace the judgemental process. To many use these things & trade on the so called signals without realizing there is nothing no top secret information a indicator gives that is not in a chart.

    Take a logical appriach to trading & you will start using your brian at what you see & not react to what you don’t see or understand. For example, why does a MACD cross over ? action of price & why does it cross down ? action of pirce. Lets say we have a MACD cross over, do we trade it as a buy ? of course not. Look to the left of the chart, is there anything that supports this cross over ? Is there some buying that came in the market within the last wo days ? Market makers will not throw money into a stock or mark the stock up unless they have determined selling has dimished. A MACD buy must have some buying to the left, in most cases this would be a breaak out. There must be some high volume of selling to the left, to push above this supply volume takes a lot of buying & effort. The market will not just shoot up.. any real buying will come back on low volume then zap right back up & when it does fall on low volume, any previous buying before the MACD cross over will support this & make sure if the market falls, it will find support at a previous resistance. Indicators are just that, to indicate. I find them useful to scan for stock selections but for trading I’ll just use one indicator then determine what price is telling me. For example, if price has some good volume & pushes up but the next bar is down then how can that be buying ? it can not so we wait & let the makret prove itself. Same is true on a down day, if we have massive volume on selling & the next day is up then we must assume any selling was bought by those supporting the market otherwise price would have continued to fall. YES! you can be 100% in trading if we expand our minds to see things in a new fashion & not take what is as what is. Trading is not complicated at all, it nothing more then common sense & some good old American logic. Nice acticle but still the MACD is my #1, it has proven good on all levels.

  2. GreatTradingSystems says:

    Both Trix and MACDs are based on moving averages. You will get very similar information from both.

    I totally agree about “there is nothing no top secret information a indicator gives that is not in a chart”, you should read some more of the site and you will see that is exactly the point I make.

    You are a different trader however, trading stocks and looking at volume and EOD. Most on here are index or fx traders, and mostly through electronic exchanges so market makers are a none issue these day in that respect.

    I do like the part- “some good old American logic”…made me smile.

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