TRIX indicator vs Relative Strength Index (RSI)

The TRIX indicator, a triple-exponential moving average, helps filter market noise and identify momentum shifts, making it valuable for crypto traders seeking reliable trend signals.

Jul 16, 2025 at 05:49 am

What Is the TRIX Indicator?

The TRIX indicator (Triple Exponential Average) is a momentum oscillator used in technical analysis to identify oversold and overbought conditions, as well as potential trend reversals. It is calculated by smoothing price data exponentially three times, then taking the percentage difference between each bar’s smoothed value.

TRIX helps traders filter out market noise, which makes it particularly useful in volatile cryptocurrency markets. When the TRIX line crosses above zero, it indicates increasing momentum, while a cross below zero suggests weakening momentum.

To calculate TRIX:

• Select a lookback period (usually 14 or 15).
• Apply an exponential moving average (EMA) three times.
• Calculate the percentage change between today’s and yesterday’s triple-smoothed EMA.

This multi-step smoothing process makes TRIX less sensitive to short-term price fluctuations, allowing for more reliable signals compared to simpler oscillators.

How Does the Relative Strength Index (RSI) Work?

The Relative Strength Index (RSI) is another popular momentum oscillator that measures the speed and change of price movements. It typically uses a 14-period lookback window to calculate average gains and losses, then normalizes the result on a scale from 0 to 100.

In crypto trading:

• An RSI above 70 suggests overbought conditions.
• An RSI below 30 implies oversold conditions.

Unlike TRIX, RSI reacts more quickly to recent price changes, making it ideal for detecting short-term extremes. However, this also means RSI can produce false signals during strong trending moves, especially in highly volatile digital asset markets.

Calculating RSI involves:

• Determining average gain and loss over the specified period.
• Calculating relative strength (RS) by dividing average gain by average loss.
• Using RS in the formula: RSI = 100 – (100 / (1 + RS))

Key Differences Between TRIX and RSI

While both TRIX and RSI are momentum oscillators, their calculation methods and signal generation differ significantly.

• Sensitivity: RSI is more reactive to recent price changes, which can lead to frequent whipsaws. In contrast, TRIX filters out much of the volatility, offering fewer but potentially more reliable signals.
• Scale: RSI operates within a fixed range (0–100), helping identify overbought and oversold levels. TRIX has no bounded range, so its values depend on market conditions and chosen settings.
• Purpose: RSI is often used to spot short-term reversal points, while TRIX focuses on longer-term trend strength and momentum shifts.

These differences make each indicator suitable for different trading strategies. For example, day traders may prefer RSI for quick entries, whereas swing traders might rely more on TRIX to gauge underlying momentum.

How to Use TRIX in Cryptocurrency Trading

Applying TRIX in crypto trading involves monitoring its zero-line crossovers and divergence patterns.

• Zero-line crossover: When TRIX moves above zero, it signals rising momentum; when it drops below zero, it suggests weakening momentum. Traders often use this as a confirmation tool alongside other indicators like moving averages.
• Divergence: If the price makes a new high but TRIX does not, it could indicate momentum exhaustion and a potential reversal.

Here's how to set up TRIX:

• Choose a period (typically 14 or 15).
• Apply the indicator to your charting platform (e.g., TradingView).
• Combine with volume or moving averages for confirmation.

Some traders also use a signal line (a moving average of TRIX) to generate additional trade signals through crossovers.

How to Use RSI in Cryptocurrency Trading

RSI is widely used in crypto due to its simplicity and effectiveness in identifying potential turning points.

• Overbought/oversold zones: Watch for RSI moving above 70 as a possible sell signal and dropping below 30 as a potential buy opportunity.
• Failure swings: These occur when RSI forms a peak or trough outside the overbought/oversold zone but then reverses direction before re-entering, indicating a strong reversal signal.
• Divergence: Similar to TRIX, if the price reaches a new high but RSI fails to do so, it may signal an imminent pullback.

To implement RSI:

• Set the default period to 14.
• Add RSI to your chart.
• Use alongside support/resistance or candlestick patterns for better accuracy.

Because of its sensitivity, many traders use RSI with longer timeframes or combine it with volatility filters like Bollinger Bands to reduce false signals.

Which One Should You Use for Crypto Trading?

Choosing between TRIX and RSI depends on your trading style and objectives.

If you're a scalper or intraday trader, RSI is more appropriate because it reacts faster to price action, helping you catch quick reversals. However, in strong trends, RSI can give misleading signals, so it's best used in sideways or choppy markets.

For swing or position traders, TRIX may be more effective. Its smoothing mechanism reduces noise and highlights stronger momentum shifts, making it easier to stay aligned with the trend.

Many professional traders combine both indicators:

• Use RSI to detect entry zones.
• Confirm with TRIX for momentum alignment.

Ultimately, neither TRIX nor RSI should be used in isolation. They work best when integrated into a broader strategy that includes price action, volume, and risk management techniques.

Frequently Asked Questions

Q: Can I use TRIX and RSI together in crypto trading?

Yes, combining TRIX and RSI can enhance trade signals. For example, RSI can help identify overbought/oversold zones, while TRIX confirms momentum direction. This combination helps filter out false signals.

Q: Which indicator gives fewer false signals in crypto markets?

TRIX tends to provide fewer false signals due to its triple-smoothing mechanism. It filters out minor price fluctuations, making it more stable than RSI, which reacts more quickly to short-term volatility.

Q: Do TRIX and RSI work well in all timeframes?

Both indicators can be applied across timeframes, but they perform differently. RSI works well on shorter timeframes (like 15-minute or 1-hour charts) for quick trades, while TRIX is more effective on daily or weekly charts for trend confirmation.

Q: How do I adjust TRIX and RSI for highly volatile cryptocurrencies like Bitcoin or Ethereum?

You can increase the lookback period for both indicators to reduce sensitivity. For RSI, using a 21-period setting instead of 14 may help. For TRIX, extending the period to 20 or more can smooth out erratic readings caused by extreme price swings.