How do you calculate the TRIX indicator?

The TRIX indicator uses triple-smoothed EMA to filter noise and identify trend reversals through zero crossovers and divergences.

Aug 05, 2025 at 04:56 pm

Understanding the TRIX Indicator and Its Purpose

The TRIX (Triple Exponential Average) indicator is a momentum oscillator used in technical analysis to identify oversold and overbought conditions, as well as potential trend reversals. It is derived from a triple-smoothed exponential moving average (EMA) of price, which helps filter out minor price fluctuations and noise. The core idea behind TRIX is to measure the rate of change of a triple-smoothed EMA, making it highly sensitive to long-term trends while minimizing short-term volatility. Traders use TRIX primarily to detect divergences between price and momentum, which can signal upcoming reversals. The indicator oscillates around a zero line, with values above zero indicating bullish momentum and values below zero suggesting bearish momentum.

Step-by-Step Calculation of the TRIX Indicator

To calculate the TRIX indicator, follow these sequential smoothing steps using exponential moving averages. Each step builds on the previous one, ultimately producing a momentum value expressed as a percentage.

• Calculate the first EMA of the closing price using the selected period (commonly 14 or 15). For example, if using a 14-period EMA, apply the EMA formula:
  EMA₁ = Closing Price × Multiplier + EMAₚᵣₑᵥ × (1 - Multiplier), where the multiplier is 2 / (14 + 1) = 0.1333.

• Use the resulting EMA₁ values to compute the second EMA (EMA₂) over the same period. This means applying the EMA formula again, this time using EMA₁ as input instead of raw closing prices.

• Apply the EMA calculation a third time to EMA₂ to obtain EMA₃, the triple-smoothed moving average. This final EMA removes most short-term noise and emphasizes the underlying trend.

• Compute the percentage rate of change between consecutive EMA₃ values. The formula is:
  TRIX = [(EMA₃ₜ - EMA₃ₜ₋₁) / EMA₃ₜ₋₁] × 100.
  
  This yields the TRIX value for each period, typically displayed as a line oscillating above and below zero.

Selecting the Appropriate Period for TRIX

The period setting in TRIX determines the sensitivity of the indicator. A shorter period, such as 9, makes TRIX more reactive to price changes, generating more signals but increasing the risk of false positives. A longer period, such as 20 or 30, smooths the output further, making it suitable for identifying major trend shifts in long-term trading strategies. The default setting in many platforms is 14 periods, which balances responsiveness and reliability. Traders should test different periods on historical data to determine which aligns best with their trading style and asset volatility. For example, in highly volatile cryptocurrency markets, a slightly longer period may help reduce whipsaws.

Interpreting TRIX Crossovers and Divergences

One of the primary ways traders use TRIX is by analyzing crossovers and divergences. When the TRIX line crosses above the zero line, it suggests increasing bullish momentum, potentially signaling a buy opportunity. Conversely, a cross below zero indicates strengthening bearish momentum, which may prompt a sell or short entry.

• A bullish divergence occurs when the price makes a lower low, but TRIX forms a higher low. This implies weakening downward momentum and a possible upward reversal.

• A bearish divergence happens when the price reaches a higher high, but TRIX prints a lower high. This signals that upward momentum is fading, even if price continues to rise.

These divergences are particularly valuable in cryptocurrency trading, where rapid price swings can precede sharp reversals. Confirming TRIX signals with volume analysis or other indicators like RSI or MACD can improve accuracy.

Smoothing TRIX with a Signal Line

To refine trading signals, many traders apply a signal line to the TRIX indicator. This is typically a 9-period EMA of the TRIX values themselves. The signal line acts as a trigger for buy and sell decisions.

• When the TRIX line crosses above the signal line, it generates a bullish signal.

• When the TRIX line crosses below the signal line, it indicates a bearish signal.

This dual-line approach helps filter out erratic movements and confirms the strength of momentum shifts. In cryptocurrency charts, where price action can be erratic, the signal line adds a layer of confirmation that may reduce premature entries.

Implementing TRIX in Trading Platforms

Most cryptocurrency trading platforms, including TradingView, Binance, and MetaTrader, support the TRIX indicator either natively or through custom scripts. To add TRIX:

• Open the chart of the desired cryptocurrency pair (e.g., BTC/USDT).

• Navigate to the indicators menu and search for “TRIX” or “Triple Exponential Average.”

• Select the indicator and configure the parameters, such as period length (e.g., 14) and signal line (e.g., 9).

• Apply the indicator to the chart. The TRIX line and optional signal line will appear in a separate pane below the price chart.

For users coding their own strategies, TRIX can be implemented in Python using libraries like pandas and ta-lib. The process involves computing three successive EMAs and then calculating the percentage change. Sample code would include:

import pandas as pd
def calculate_trix(data, period=14):
ema1 = data['close'].ewm(span=period).mean()
ema2 = ema1.ewm(span=period).mean()
ema3 = ema2.ewm(span=period).mean()
trix = (ema3 - ema3.shift(1)) / ema3.shift(1) * 100
return trix
Frequently Asked Questions
Can TRIX be used on intraday cryptocurrency charts?

Yes, TRIX is effective on intraday timeframes such as 15-minute, 1-hour, or 4-hour charts. However, due to the triple smoothing, it may lag slightly on very short timeframes. Adjusting the period to a smaller value (e.g., 9) can enhance responsiveness for day trading.

Is TRIX suitable for all cryptocurrencies?

TRIX performs best on assets with consistent trends. Major cryptocurrencies like Bitcoin and Ethereum tend to exhibit clearer trends, making TRIX more reliable. For low-cap altcoins with erratic price movements, TRIX may generate misleading signals.

How does TRIX differ from MACD?

While both are momentum oscillators based on EMAs, MACD uses the difference between two EMAs, whereas TRIX is based on a triple-smoothed EMA and measures the percentage change. TRIX is generally smoother and less prone to noise than MACD.

Can TRIX be combined with moving averages?

Absolutely. Combining TRIX with a long-term moving average (e.g., 200-period EMA) can help confirm the overall trend direction. For instance, only taking long signals from TRIX when price is above the 200 EMA improves strategic alignment.