What Is TRIX Indicator (Trading Strategy)

TRIX (triple smooth exponential moving average) indicator is the momentum Oscillator. The indicator includes three things

  1. TRIX line
  2. Zero line.
  3. Right side indicator values.

It will give buy and sell signals using these three components.

TRIX Indicator Setting

TRIX Indicator
  • Period: The default period is 14. this means the 14 periods (candlesticks) price will take to calculate this indicator.
  • Result: This is the Indicator line color.

TRIX Indicator trading strategy

Strategy 1:

  • Buying strategy: when the indicator line is crossing above the zero line. this is the buying signal.
  • Selling signal: when the indicator line is crossing below the zero line and moving to downward. this is the short-selling position.

Note: This is not that easy to buy above zero line and sell below the zero line. because sometime the indicator line is rising above the zero line then started falling below the zero line. so that’s why you have to find a strong trend. you can use supertrend indicator with this.

Strategy 2:

  • Use supertrend indicator with this indicator so that. if the supertrend indicator showing the trend is bullish then you have to wait for crossing above the zero line. if the line crossing the zero line and moving upward direction then you can take a buying position.
  • Sell signal: in the supertrend indicator if the supertrend line is showing the trend is bearish. then if the Trix line crossing below the zero line then you can take a short sell signal.

Strategy 3:

Buying signal: if the market is in a bearish trend and the and the share price is touching lower low and the Trix line is not touching lower low. this is the bullish divergence. and the share price may rise soon. if the share price is started rising then you can buy the stock.

Short Sell signal: if the market is in the bullish trend and the stock price is touching higher high and the Trix line is not touching higher high. this is the bearish divergence. and the share price may fall soon. if the stock price is started falling then you can take a short-selling position.

Conclusion

TRIX indicator means Triple smooth exponential moving average indicator. Where (TRI = Triple and X= Exponential moving average).

Using this indicator, you can buy or sell the stock. in the trending market, this will give you better signals compare to the range-bound market.

*Read Related Post For More information.


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