What are the historical buy and sell signals for a specific crypto using TRIX?

The TRIX indicator helps crypto traders identify trend reversals by filtering noise with triple EMA smoothing, offering reliable buy/sell signals when combined with volume and market context.

Aug 05, 2025 at 09:57 am

Understanding the TRIX Indicator in Cryptocurrency Trading

The TRIX (Triple Exponential Average) indicator is a momentum oscillator designed to filter out short-term volatility and identify significant trends in asset prices. It is derived by applying a triple exponential moving average (EMA) to price data, then calculating the percentage rate of change of that smoothed average. In the context of cryptocurrency trading, TRIX helps traders spot trend reversals, overbought or oversold conditions, and potential entry or exit points. Because cryptocurrencies are highly volatile, TRIX is particularly useful for reducing noise and focusing on sustained price movements.

The core calculation involves three stages: first, a single EMA of closing prices; second, an EMA of the first EMA; third, an EMA of the second EMA. The final value is derived from the percentage change in this triple-smoothed line. A signal line—typically a 9-period EMA of the TRIX values—is often plotted alongside to generate crossover signals. When the TRIX line crosses above the signal line, it may indicate a buy signal; when it crosses below, a sell signal.

Historical Buy Signals Using TRIX on Bitcoin (BTC)

Examining historical data for Bitcoin (BTC) using the TRIX indicator reveals several notable buy signals. For instance, during the post-halving recovery in 2020, TRIX crossed above its signal line in late April, shortly after BTC found support near $6,500. This crossover coincided with the beginning of a strong upward trend that led to new all-time highs by the end of the year.

• Identify the TRIX line crossing above the signal line on a daily chart
• Confirm the crossover occurs after a period of negative or flat TRIX values
• Observe increasing volume to validate the strength of the move
• Check for alignment with broader market sentiment or macroeconomic catalysts

Another significant buy signal occurred in late 2022, following the FTX collapse, when BTC dropped below $16,000. The TRIX indicator turned positive in December 2022 as the triple EMA began accelerating upward, signaling the start of a recovery phase. Traders who acted on this signal entered before the 2023 bull run gained substantial upside.

Historical Sell Signals in Ethereum (ETH) via TRIX Analysis

In the case of Ethereum (ETH), TRIX has also produced reliable historical sell signals. One prominent example occurred in November 2021, when ETH reached an all-time high near $4,800. At that time, the TRIX line peaked and began to turn downward, crossing below its signal line. This bearish crossover preceded a prolonged correction that lasted into 2022.

• Monitor for the TRIX line crossing below the signal line on a daily or weekly timeframe
• Ensure the crossover happens after a sustained uptrend
• Look for divergence between price and TRIX—where price makes a higher high but TRIX does not
• Consider reducing long positions or initiating short positions upon confirmation

Another notable sell signal emerged in May 2022, during the broader crypto market downturn. TRIX turned negative as ETH dropped from $3,000 to below $1,000. The sustained negative momentum reflected in TRIX indicated that the downtrend was likely to continue, helping traders avoid further losses.

Applying TRIX to Altcoins: The Case of Cardano (ADA)

Altcoins like Cardano (ADA) exhibit more volatility than major cryptocurrencies, making TRIX a valuable tool for filtering false signals. In early 2021, ADA surged from $0.18 to over $1. During this rally, TRIX crossed above its signal line in January 2021, confirming the start of a bullish phase. The indicator remained positive throughout the ascent, only turning negative in May 2021 as the market corrected.

To apply TRIX effectively on ADA:

• Use a 14-period TRIX with a 9-period signal line on the daily chart
• Wait for the TRIX line to cross above zero for stronger buy confirmation
• Avoid entering trades based solely on crossovers during sideways markets
• Combine with on-chain data, such as exchange outflows, to increase signal reliability

A subsequent sell signal occurred in September 2021 when TRIX crossed below the signal line after ADA peaked near $3. This was followed by a 60% decline over the next few months, validating the indicator’s effectiveness.

Step-by-Step Guide to Backtesting TRIX Signals

To evaluate historical buy and sell signals accurately, traders can backtest TRIX on any cryptocurrency using the following steps:

• Select a cryptocurrency and timeframe (e.g., BTC/USD daily chart)
• Apply the TRIX indicator with standard settings (14-period triple EMA)
• Add a 9-period EMA of TRIX as the signal line
• Identify all instances where TRIX crosses above or below the signal line
• Record the date, price, and subsequent price movement over the next 7, 14, and 30 days
• Filter results by requiring TRIX to be below zero before a buy signal and above zero before a sell signal
• Compare outcomes with major news events or market cycles for context

Platforms like TradingView allow users to automate this process using Pine Script. For example, a simple script can highlight all TRIX crossovers and log performance metrics. Backtesting helps determine whether TRIX signals are more effective in bull or bear markets and across different digital assets.

Common Misinterpretations and How to Avoid Them

One frequent mistake is acting on every TRIX crossover without considering the broader trend. In ranging markets, TRIX generates multiple false signals due to whipsaws. To mitigate this, traders should only consider signals that align with the dominant trend, confirmed by tools like the 200-day moving average.

Another issue arises when traders ignore divergence. For example, if BTC reaches a new high but TRIX fails to surpass its previous peak, this bearish divergence suggests weakening momentum—even if no crossover has occurred yet. Recognizing such patterns early can prevent late entries.

Additionally, using TRIX on lower timeframes (e.g., 5-minute charts) increases noise and reduces reliability. It is advisable to use daily or weekly charts for primary signal generation and lower timeframes only for fine-tuning entries.

Frequently Asked Questions

What is the optimal TRIX period setting for cryptocurrency trading?

The most commonly used setting is 14 periods, which balances sensitivity and smoothing. Some traders adjust it to 12 for faster signals or 18 for reduced noise, depending on the asset’s volatility.

Can TRIX be used alongside RSI or MACD?

Yes, combining TRIX with RSI helps confirm overbought or oversold conditions, while pairing it with MACD provides additional trend validation. For example, a TRIX buy signal is stronger when RSI exits oversold territory and MACD turns bullish.

Does TRIX work well during low-volume periods?

TRIX may produce unreliable signals during low-volume periods, such as weekends or holidays, when price movements lack conviction. It is best to filter signals using volume indicators or wait for confirmation on higher timeframes.

How do I set up TRIX on TradingView?

Open a chart, click “Indicators,” search for “TRIX,” and add it. Customize the length (e.g., 14) and signal line (e.g., 9). To create alerts, click the “Settings” icon, go to “Alerts,” and define conditions like “TRIX crosses above signal line.”