TRIX impulsive indicator was suggested by analyst J. Huston for trading use as well as analysis of directional price changes. This indicator can be used well as an instrument that enables filtering of insignificant price changes in the respect of greater market trend with the regard of bigger cycle.
Formula
TRIX = K%(EMAn (EMAn ( EMAn))), where
K% is taken in the respect of the previous period
Trading use
TRIX indicator is an instrument that shows the slope of a triple-smoothed EMA.
Taking into account that the indicator measures the degree of changes in closing price, the growth of indicator lines signifies about probable steady uptrend. At the same time, if the value of indicator is decreasing, then the downward price movement is unfolding. Thus, in case the indicator crosses zero line in any direction, it means that the price can continue its development correspondingly.
When using TRIX indicator, pay attention to the behavior of signal line in relation towards the indicator's trend line. Buy signal emerge if TRIX crosses its signal line upwards while sell signal appear in case the indicator crosses it downwards.
This indicator belongs to impulsive ones, that is why it can be perfectly used during strong trend movements. But when the market is flat, many false signals can be received.
The indicator was tested for the use in mechanical trading system which proves that the most profitable signal for TRIX is crossing of signal line. Crossing of zero line can be better regarded as the probable continuation of price changes rather than the signal towards positions opening towards the breakthrough of zero level.
InstaForex TRIX Parameters
TRIX_period = 13
Signal + period = 8
Count_bars = 1500
