Who developed the TRIX indicator?

Origin and Invention of the TRIX Indicator

The TRIX indicator was developed by Jack Hutson, an American technical analyst, in the early 1980s. Jack Hutson introduced TRIX as a momentum oscillator designed to filter out short-term market noise and identify meaningful trends in price movements. The name TRIX stands for 'Triple Exponential Smoothing', which reflects the core mathematical process behind the indicator. By applying exponential moving averages (EMAs) three times to price data, TRIX aims to eliminate minor fluctuations and highlight sustained directional momentum. This method of triple smoothing was revolutionary at the time, providing traders with a cleaner signal compared to traditional moving averages.

Mathematical Foundation of TRIX

The calculation of the TRIX indicator involves several precise steps, each contributing to its effectiveness in detecting trend reversals and momentum shifts. The process begins with selecting a price input, typically the closing price. Then, a single exponential moving average (EMA) is applied to this price series. This first EMA is then smoothed again using another EMA, resulting in a double-smoothed series. The third and final smoothing step applies a third EMA to the double-smoothed data. Once this triple-smoothed EMA is obtained, the TRIX value is derived by calculating the percentage rate of change between the current and previous values of this final smoothed series.

• Calculate the first EMA over a user-defined period (e.g., 14 periods)
• Apply a second EMA to the result of the first EMA
• Apply a third EMA to the result of the second EMA
• Compute the percentage change between today’s and yesterday’s triple-smoothed EMA

This percentage change is what is plotted as the TRIX line on a chart. The use of triple exponential smoothing makes TRIX highly sensitive to sustained trends while minimizing false signals from volatility.

Role of Jack Hutson in Technical Analysis

Jack Hutson was not only the creator of the TRIX indicator but also a respected contributor to the field of technical analysis through his work as an editor for Technical Analysis of Stocks & Commodities magazine. His research emphasized clarity in signal generation and the reduction of whipsaws in trading systems. The development of TRIX was part of a broader effort to refine trend-following tools. His work gained recognition because TRIX could be used both as a trend identifier and as a divergence detector. When the price makes a new high but TRIX fails to surpass its prior peak, this bearish divergence can signal weakening momentum. Hutson's emphasis on signal reliability helped TRIX gain acceptance among professional traders and analysts.

Implementation of TRIX in Trading Platforms

Most modern trading platforms, including TradingView, MetaTrader 4/5, and Thinkorswim, include the TRIX indicator as a built-in technical tool. To apply TRIX, traders navigate to the indicators menu and search for 'TRIX' or 'Triple Exponential Average'. Once selected, the default settings usually include a period length (commonly 14) and the option to choose the price source (typically close). The platform automatically performs the triple EMA calculation and plots the resulting oscillator line.

• Open your charting platform
• Click on the 'Indicators' or 'Studies' button
• Search for 'TRIX' in the indicator library
• Select the TRIX indicator and add it to the chart
• Adjust the period length and price input if needed
• Observe the oscillator line and zero-line crossovers

Some platforms also allow users to add a signal line, which is a moving average of the TRIX line itself, to generate additional trade signals through crossovers. This customization enhances the usability of TRIX in various market conditions.

Interpreting TRIX Signals in Practice

Traders use the TRIX indicator to generate actionable signals based on crossovers, zero-line crossings, and divergences. A cross above the zero line is interpreted as a bullish signal, suggesting that momentum is shifting upward after a period of decline. Conversely, a cross below zero indicates bearish momentum. These zero-line crossovers are particularly useful in trending markets.

• A TRIX line crossing above zero may suggest a long entry
• A TRIX line crossing below zero may suggest a short entry
• A crossover between TRIX and its signal line can confirm momentum shifts
• Bullish divergence occurs when price drops but TRIX forms a higher low
• Bearish divergence occurs when price rises but TRIX forms a lower high

For example, if a cryptocurrency like Bitcoin reaches a new high but the TRIX indicator fails to exceed its previous peak, this bearish divergence could warn of an impending reversal. Traders often combine TRIX with volume analysis or other oscillators like RSI or MACD to improve signal accuracy.

TRIX in the Cryptocurrency Market Context

In the volatile world of cryptocurrency trading, the TRIX indicator offers a valuable tool for filtering out noise caused by rapid price swings. Due to the 24/7 nature of crypto markets and frequent pump-and-dump schemes, traditional indicators can generate false signals. However, the triple smoothing mechanism of TRIX helps reduce such noise, making it suitable for identifying genuine trend momentum in assets like Ethereum, Solana, or Cardano.

For instance, during a prolonged uptrend in Binance Coin, a sustained TRIX value above zero confirms bullish momentum. If TRIX begins to decline while price continues to rise, this divergence may prompt traders to secure profits or tighten stop-loss orders. Many algorithmic trading bots integrate TRIX into their decision-making logic, especially when programmed to detect crossover events or divergence patterns across multiple timeframes.

Frequently Asked Questions

Can TRIX be used on different timeframes in crypto trading?Yes, TRIX can be applied to any timeframe, from 1-minute charts to weekly charts. Shorter timeframes like 5-minute or 15-minute are often used by day traders, while swing traders prefer 4-hour or daily charts. The interpretation remains consistent: zero-line crossovers and divergences are valid signals regardless of the timeframe, though signals on higher timeframes are generally considered more reliable due to reduced noise.

Is TRIX effective for all cryptocurrencies?TRIX performs best on cryptocurrencies with consistent trading volume and identifiable trends. It may generate unreliable signals in low-liquidity altcoins that experience erratic price movements. For major coins like Bitcoin and Ethereum, TRIX is more effective because their price data is less susceptible to manipulation and short-term volatility.

How does TRIX differ from MACD?While both are momentum oscillators, TRIX applies triple exponential smoothing, whereas MACD uses the difference between two EMAs and a signal line. TRIX is generally smoother and less prone to whipsaws. MACD reacts faster to price changes, making it more sensitive, while TRIX focuses on sustained momentum, making it better for filtering out noise.

Can TRIX be combined with other indicators?Absolutely. Traders frequently combine TRIX with volume indicators, RSI, or moving averages to confirm signals. For example, a TRIX zero-line crossover coinciding with rising volume and a breakout above a key moving average can strengthen the validity of a trade signal. Combining tools helps reduce false positives in fast-moving crypto markets.