TRIX (or Triple Exponential Average) was initially introduced by magazine editor, Jack Huston, to the trading industry in the 80s. In an article featured on Technical Analysis of Stocks & Commodities, he called the attention of trend-traders. It’s about coming up with a variety of strategies regarding the most profitable time to enter and exit the foreign exchange market. If you’re planning to use it to get an advantage, do you already know enough about the trading system?
Introduction to TRIX-Trading
TRIX-trading is the trading system that is focused on identifying the triple exponential average with a certain timeframe in mind; it also serves as an oscillator and a momentum indicator. With the results, it becomes less challenging to spot extreme conditions, as well as overbought and oversold markets. It is similar to most oscillators; it moves around 0.
In TRIX-trading, you are giving light to the period of time, log prices, and previous and current bar inputs; the figures are necessary for the triple exponential average calculation. First, the values for the previous and current bars are identified; next, the value for the previous bar is subtracted from the value of the current bar.
Understanding the Components of TRIX
Granted that you have a thorough understanding of the components of a triple moving average, TRIX-trading is rather easy; the trading system identifies 0 and the focus is to oscillate around it. After determining the 0 line, start the analysis; a reading below 0 is an indication of a downtrend, and conversely, a reading above 0 is an indication of an uptrend. In either cases, a declining line, whether it is still above 0 is considered a downtrend; while an accelerating line, whether it is still below 0 is an uptrend.
So, Is Being a TRIX-Trading Expert a Good Thing?
Since TRIX-trading can make the odds in the forex market go in your favor, yes, being a TRIX-trading expert is a good thing. You can use the trading system as a primary lagging indicator; you can be a market leader by initiating a remarkable trend. The particular strategy can also be used to filter out market noise; minor and unwanted indicators of a potential change in market direction will be eliminated, and short cycles will no longer be impactful. Especially if you’re a pro at analyzing TRIX and its components, you are looking at a profitable forex trading career.
Content Contribution: Mr. Adam has contributed from MTrading Philipinees