What is Trix Indicator and Trading Strategies?

If you’re into trading or just starting to learn about technical indicators, you might have come across something called the TRIX indicator. At first glance, it might sound a bit technical or even confusing, but don’t worry. In this article, we’ll break it down in plain English. We’ll cover what the TRIX indicator is, how it works, the formula behind it, and most importantly, how traders use it to make decisions in the market.

What is TRIX Indicator Definition?

TRIX stands for Triple Exponential Average. It’s a momentum indicator used by traders to spot trends and potential reversals. The main goal of the TRIX indicator is to filter out market noise and focus only on meaningful price movements.

In simple terms, it shows how fast or slow prices are changing, but with an extra layer of smoothing so you don’t get distracted by small, unimportant fluctuations.

Why is it Called ‘Triple’ Exponential?

The “triple” in TRIX refers to the three times exponential smoothing applied to the price data. Exponential moving averages (EMAs) give more weight to recent prices, so by applying it three times, TRIX becomes really good at highlighting the true trend and ignoring the choppy market noise.

This smoothing helps traders stay focused on the bigger picture rather than reacting to every small price move.

What is TRIX Indicator Formula?

If you’re a bit into the maths, here’s how the TRIX indicator is calculated:

1. First EMA: Take an exponential moving average of the closing price over a selected period (usually 15).
2. Second EMA: Take another EMA of that result.
3. Third EMA: Apply another EMA to the second result. Now you have the Triple Exponential Moving Average.
4. TRIX Value: The percentage rate of change of this third EMA.

So, the formula becomes:

TRIX = [(Triple EMA today – Triple EMA yesterday) / Triple EMA yesterday] × 100

How to Interpret the TRIX Indicator?

The TRIX indicator is displayed as a line oscillating above and below zero. Here’s how traders typically interpret it:

1. Above Zero Line (Positive TRIX)

• This suggests that prices are in an uptrend.
• Momentum is positive, and bulls are likely in control.

2. Below Zero Line (Negative TRIX)

• This implies a downtrend.
• Momentum is negative, and bears may be dominating.

3. Signal Line Crossovers

• Just like the MACD indicator, TRIX often includes a signal line, which is a simple moving average of the TRIX line.
• A bullish crossover (TRIX line crossing above the signal line) can mean it’s time to buy.
• A bearish crossover (TRIX line crossing below the signal line) can indicate a selling opportunity.

What are Benefits of Using the TRIX Indicator?

TRIX stands out for a few good reasons:

• Noise Filtering: The triple smoothing removes unnecessary signals caused by small price movements.
• Trend-Following: It works well for spotting and riding strong trends.
• Momentum Detection: It helps identify changes in momentum, which is key for short-term traders.
• Combines Well with Other Indicators: TRIX is often used with volume indicators or RSI (Relative Strength Index) for more accurate signals.

What are Limitations of TRIX?

While the TRIX indicator is powerful, it’s not perfect:

• Lagging Indicator: Because of its smoothing, it may respond a bit late to sudden price changes.
• False Signals in Sideways Markets: TRIX works best in trending markets. During low-volatility or sideways conditions, it can give misleading signals.

What are Popular TRIX Trading Strategies?

Let’s go through a few beginner-friendly strategies using TRIX:

1. TRIX Signal Line Crossover Strategy

Setup:

• Add the TRIX indicator and its signal line to your chart.
• Wait for the TRIX line to cross the signal line.

Buy Signal:

• When the TRIX line crosses above the signal line.

Sell Signal:

• When the TRIX line crosses below the signal line.

Suitable for: Short to medium-term trades.

2. Zero Line Crossover Strategy

Setup:

• Focus on when the TRIX line crosses the zero line.

Buy Signal:

• TRIX crosses above zero, indicating an uptrend.

Sell Signal:

• TRIX crosses below zero, signalling a downtrend.

Suitable for: Trend-following strategies.

3. TRIX with Volume Strategy

Adding a volume indicator like On-Balance Volume (OBV) can confirm TRIX signals.

Buy Setup:

• TRIX gives a bullish crossover.
• OBV is rising (confirming buying pressure).

Sell Setup:

• TRIX gives a bearish crossover.
• OBV is falling (confirming selling pressure).

Suitable for: Strong confirmation before entering trades.

4. TRIX and Support/Resistance Strategy

Combine TRIX signals with horizontal support and resistance levels.

Example:

• Price bounces off a known support level.
• TRIX gives a bullish crossover or crosses above zero.

This increases your confidence in the trade.

How to Customise TRIX Settings?

The standard period for TRIX is 15, but you can adjust it:

• Shorter Period (e.g. 9) – More sensitive to price, more signals but possibly more false ones.
• Longer Period (e.g. 21) – Smoother and more reliable, but slower to react.

Experiment in demo trading before going live to see what fits your style.

What are Suitable Markets and Timeframes for TRIX?

The TRIX indicator can be used in:

• Stocks
• Forex
• Cryptocurrency
• Commodities

It works well across various timeframes, from intraday charts to weekly, but is especially helpful for swing trading and trend-following setups.

TRIX vs Other Indicators

TRIX is unique because it combines momentum with trend-following in a smooth and noise-free way.

Conclusion

The TRIX indicator is a fantastic tool for traders looking to stay on the right side of the trend while avoiding unnecessary market noise. It’s simple enough to understand but powerful enough to make a real difference in your trading strategy.

Just remember: no indicator should be used alone. Combine TRIX with other tools, use proper risk management, and always test your strategies before committing real money.

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