Who developed the TRIX indicator?

Developed by Jack Hutson in the 1980s, the TRIX indicator uses triple exponential smoothing to filter noise and identify significant trends in cryptocurrency markets.

Aug 01, 2025 at 09:15 am

Origins and Inventors of the TRIX Indicator

The TRIX indicator was developed by Jack Hutson, an American technical analyst, in the early 1980s. Jack Hutson introduced this momentum oscillator in a series of articles published in Technical Analysis of Stocks & Commodities magazine. His goal was to create a tool that could filter out minor price fluctuations and highlight only significant trends by focusing on the rate of change of a triple-smoothed exponential moving average (EMA). The name "TRIX" is derived from "Triple Exponential," which reflects the core mathematical operation behind the indicator. This innovation provided traders with a refined method to assess trend strength and potential reversals without the noise commonly found in raw price data.

Mathematical Foundation of the TRIX Indicator

Understanding the calculation behind the TRIX indicator is essential to grasp its significance. The process involves multiple layers of exponential smoothing, each designed to eliminate short-term volatility.

• Apply a 1-period Exponential Moving Average (EMA) to the closing prices.
• Apply a second EMA to the result of the first EMA.
• Apply a third EMA to the output of the second EMA.
  Once the triple-smoothed EMA is obtained, the TRIX value is calculated as the percentage rate of change between the current triple-smoothed EMA and the previous period’s value. This final output forms the TRIX line, which oscillates around a zero line. When the TRIX line crosses above zero, it suggests increasing upward momentum; when it crosses below, it indicates strengthening downward momentum.
  

  Role of the Signal Line in TRIX Analysis

  
  Many trading platforms enhance the TRIX indicator by including a signal line, typically a 9-period EMA of the TRIX values. This addition allows traders to generate more precise entry and exit signals.
• When the TRIX line crosses above the signal line, it may indicate a bullish signal.
• Conversely, a cross below the signal line can suggest a bearish signal.
  The signal line acts as a trigger mechanism, helping traders avoid false signals caused by minor oscillations. Traders often combine this crossover strategy with volume analysis or other confirmation tools to improve accuracy. The responsiveness of the signal line depends on the chosen period length, with shorter periods generating more signals and longer periods producing fewer but potentially more reliable ones.
  

  Practical Application in Cryptocurrency Trading

  
  In the context of cryptocurrency markets, the TRIX indicator proves particularly useful due to the high volatility and frequent false breakouts. Traders use it to identify trend reversals and momentum shifts in assets like Bitcoin (BTC) and Ethereum (ETH).
• A sustained positive TRIX value indicates that the cryptocurrency is in an uptrend.
• A negative TRIX value over several periods suggests a downtrend.
  For example, when analyzing a 4-hour chart of BTC/USDT, a trader might observe the TRIX line crossing above zero after a prolonged negative phase, signaling a potential long entry. To reduce risk, they may wait for the TRIX line to also cross above its signal line before executing a trade. This layered confirmation helps filter out whipsaws common in crypto price action.
  

  Configuring TRIX Parameters on Trading Platforms

  
  Most modern cryptocurrency trading platforms, such as TradingView, Binance, and Bybit, support the TRIX indicator with customizable settings. To apply it:
• Open the chart of the desired cryptocurrency pair.
• Click on the "Indicators" button or search bar.
• Type "TRIX" and select the built-in TRIX oscillator.
• Adjust the EMA period (commonly set to 14 or 15).
• Optionally, modify the signal line period (default often 9).
• Choose display preferences such as line color and thickness.
  Once applied, the TRIX line will appear in a separate window below the price chart. Traders can save this configuration as a template for future use. It is crucial to backtest different parameter combinations on historical data to determine optimal settings for specific cryptocurrencies, as highly volatile altcoins may require different smoothing periods than major assets.
  

  Limitations and Risk Mitigation Strategies

  
  While the TRIX indicator is powerful, it is not without limitations. Because it relies on triple smoothing, it can lag behind sudden price movements, especially during news-driven spikes common in crypto markets. This delay may result in late entries or exits.
  To mitigate this risk, traders often combine TRIX with volume indicators like OBV (On-Balance Volume) or volatility-based tools such as Bollinger Bands. Another effective strategy is to use TRIX in conjunction with support and resistance levels. For instance, a TRIX crossover occurring near a key resistance zone may be treated with caution, even if the signal appears bullish. Additionally, applying TRIX across multiple timeframes—such as checking the daily TRIX trend before acting on a 1-hour signal—can improve decision-making accuracy.
  

  Frequently Asked Questions

  
  Q: Can the TRIX indicator be used for scalping in cryptocurrency markets?
  Yes, the TRIX indicator can be adapted for scalping by reducing the EMA period to a lower value, such as 6 or 8, to increase sensitivity. However, this increases the likelihood of false signals. Scalpers should combine TRIX with tight stop-loss orders and real-time volume data to confirm momentum shifts.
  

  Q: Is the TRIX indicator available on mobile trading apps?
  
  Yes, most mobile trading applications, including TradingView Mobile, Binance App, and KuCoin, include the TRIX indicator. Users can access it through the indicators menu, apply it to any crypto chart, and adjust parameters directly on their smartphones or tablets.

  Q: How does TRIX differ from the MACD indicator?
  
  While both are momentum oscillators, TRIX uses triple exponential smoothing, making it more effective at filtering out market noise compared to MACD, which uses double smoothing. TRIX tends to produce fewer signals but with potentially higher reliability, especially in trending markets.

  Q: Can TRIX be applied to non-price data such as trading volume?
  
  Technically, yes. Some advanced platforms allow custom scripting where TRIX can be applied to volume or other derived data series. However, this is not standard practice, and the traditional use of TRIX focuses exclusively on price-based EMAs.