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TRIX - Triple Exponential Smoothing Oscillator
As a momentum indicator, this oscillator is based on
smoothed moving averages and their momentum to avoid insignificant
daily price movements and to aid timing.
Overview
TRIX, developed by John Hutson, displays the percent
rate-of-change of a triple exponentially smoothed moving average using
an equity's closing price.
- TRIX swings on an open scale around a zero line
- A buy signal is generated by extreme negative levels
- A sell signal is generated by extreme positive levels
- Divergences between TRIX and the equity can aid in timing turning
points.
Interpretation
- TRIX is best used in conjunction with CCI or Parabolic
SAR.
- Depending on the number of periods chosen, TRIX keeps an investor
in trends shorter than specified.
Signals
Similar to the use of the MACD indicator, a 9-period
moving average of the TRIX can be used to create a signal line.
- A buy signal is given when the TRIX rises above its signal
line.
- A sell signal is given when it falls below the signal line.
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