Constructing TRIX from nested exponential averages

How the oscillator is assembled

TRIX is a momentum oscillator built from three nested exponential averages of the close and the one-interval percent change of the last average. Assembly starts with an n-period exponential average of the close. A nested-exponential-average is then applied to that result, and the same-length average is applied once more, so three exponential averages of equal length sit on top of one another.

The finished series is the one-interval percent change of the third average. Nine-period and twelve-period lengths are listed as common choices for each of the three exponential averages. The percent-change step uses a one-interval horizon that can be one day or another defined sample such as one minute or one hour.

What triple smoothing is meant to mute

The construction is framed as a momentum oscillator whose triple-smoothing is meant to mute short-lived price noise associated with false breakouts. Successive smoothing is illustrated as leaving the oscillator with little short-horizon zigzag. In that illustration, a sharp price pullback flattened the oscillator instead of forcing a zero-line recross.

Readings of the finished oscillator

One documented convention is a zero-line-reading, which locates state changes where the finished oscillator crosses a horizontal zero line.

An alternative convention replaces the zero line with a trigger-line: a second TRIX series of a slower or faster speed used as a crossing reference.

A third convention is a divergence-reading that compares the oscillator path with the price path, including a falling oscillator against advancing or flat price.