What is the formula for the TRIX indicator?

The TRIX indicator uses triple exponential smoothing to filter noise and identify trend reversals in crypto markets, with zero-line crossovers signaling bullish or bearish momentum.

Aug 02, 2025 at 02:01 am

Understanding the TRIX Indicator in Cryptocurrency Analysis

The TRIX indicator, short for Triple Exponential Average, is a momentum oscillator used in technical analysis to identify oversold and overbought conditions, as well as potential trend reversals in cryptocurrency price movements. It is particularly effective in filtering out minor price fluctuations, focusing instead on longer-term trends by applying triple exponential smoothing to price data. This makes TRIX especially useful for traders analyzing volatile assets like Bitcoin or Ethereum, where noise can distort short-term signals.

The core idea behind TRIX is to smooth price data multiple times to eliminate insignificant volatility. The result is a single-line oscillator that oscillates around a zero line. When the TRIX line crosses above zero, it may signal bullish momentum; when it crosses below zero, it may indicate bearish momentum. The formula is built upon repeated applications of the exponential moving average (EMA), which is weighted more heavily toward recent prices.

The Mathematical Formula Behind TRIX

The TRIX indicator is calculated using the following multi-step process:

• Calculate the first EMA of the closing price over a specified period (typically 14 or 18 periods).
• Use the result of the first EMA to calculate a second EMA over the same period.
• Apply a third EMA to the second EMA using the same period length.
• Compute the percentage rate of change between the current triple-smoothed EMA value and the previous value.

The final formula for the TRIX value at time t is:

TRIX = [(EMA₃(t) - EMA₃(t-1)) / EMA₃(t-1)] × 100

Where:

• EMA₃(t) is the third EMA value at time t
• EMA₃(t-1) is the third EMA value at the prior time step

This percentage change forms the oscillator line plotted on the chart. The multiplication by 100 converts the result into a percentage, making it easier to interpret momentum shifts.

Step-by-Step Calculation of TRIX for Cryptocurrency Data

To compute TRIX manually using cryptocurrency price data, follow these detailed steps:

• Gather the closing prices of a cryptocurrency (e.g., BTC/USD) for at least 15 consecutive periods if using a 14-period setting.
• Calculate the first EMA(14) using the standard EMA formula:
  EMA_today = (Price_today × α) + (EMA_yesterday × (1 - α)), where α = 2 / (N + 1), and N = 14.
• Use the resulting EMA values to compute the second EMA(14), applying the same formula to the first EMA series.
• Apply the EMA(14) formula again to the second EMA series to obtain the third EMA(14).
• Subtract the prior period’s third EMA from the current third EMA: Difference = EMA₃_today - EMA₃_yesterday.
• Divide the difference by the prior third EMA: Ratio = Difference / EMA₃_yesterday.
• Multiply the ratio by 100 to get the TRIX value for the current period.

Repeat this process for each new candlestick as it closes. Most trading platforms automate this, but understanding the mechanics ensures better interpretation.

Implementing TRIX in TradingView or Python

To implement TRIX programmatically, such as in TradingView's Pine Script or Python, the logic must reflect the triple EMA structure.

In Pine Script, the code would resemble:

length = input(14, title="Length")
ema1 = ta.ema(close, length)
ema2 = ta.ema(ema1, length)
ema3 = ta.ema(ema2, length)
trix = ta.sma((ema3 - ema3[1]) / ema3[1] * 100, 1)
plot(trix, color=color.blue)

In Python, using libraries like pandas and numpy:

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.diff() / ema3.shift(1)) * 100
return trix
Ensure the data is sorted by timestamp and contains a 'close' column. The .diff() calculates the difference between consecutive values, and .shift(1) retrieves the prior value for division.
Interpreting TRIX Signals in Crypto Markets
TRIX generates actionable signals when used correctly in cryptocurrency trading. A cross above the zero line suggests increasing bullish momentum, potentially indicating a good entry point. Conversely, a cross below zero may signal bearish momentum and a possible exit or short opportunity.
Another common strategy involves using a signal line, which is typically a 9-period EMA of the TRIX values. When the TRIX line crosses above this signal line, it generates a bullish signal. When it crosses below, it produces a bearish signal.
Divergences are also significant. If the price of a cryptocurrency makes a new high but the TRIX fails to surpass its prior high, this bearish divergence may warn of weakening momentum. Similarly, a bullish divergence occurs when price hits a new low but TRIX forms a higher low.
Common Parameters and Customization
While the default period for TRIX is often 14, traders adjust this based on their strategy and timeframe. Shorter periods (e.g., 9) make TRIX more sensitive, suitable for scalping on 5-minute or 15-minute crypto charts. Longer periods (e.g., 20 or 30) reduce noise, better suited for daily or weekly charts.
Some platforms allow smoothing the TRIX output further or adding histogram representations. The choice of price input—usually closing price—can also be modified to use typical price or weighted close, though closing price remains standard.
Frequently Asked Questions
What is the significance of the zero line in TRIX?

The zero line acts as a momentum threshold. Values above zero indicate positive momentum; values below indicate negative momentum. Crossing this line is often interpreted as a shift in trend direction.

Can TRIX be used on intraday cryptocurrency charts?

Yes, TRIX is effective on intraday charts like 1-hour or 15-minute intervals. Shorter settings (e.g., 9-period) enhance responsiveness, helping traders identify quick momentum shifts in fast-moving crypto markets.

How does TRIX differ from MACD?

While both are momentum oscillators, TRIX applies triple EMA smoothing, making it less reactive than MACD, which uses only double smoothing. TRIX is designed to eliminate minor price movements, focusing on sustained trends.

Is TRIX suitable for all cryptocurrencies?

TRIX works best on highly liquid cryptocurrencies like Bitcoin and Ethereum, where price data is reliable and trends are more pronounced. It may generate false signals on low-volume altcoins due to erratic price behavior.