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10.43 TRIX

TRIX by Jack Hutson shows the slope of a triple-smoothed N-day exponential moving average of closing prices. The slope is calculated as a percentage change between today and yesterday’s triple smoothed EMA values.

             EMAofEMAofEMA[today] - EMAofEMAofEMA[yesterday]
TRIX = 100 * ---------------------------------------

A positive TRIX means the triple EMA is rising, suggesting a steady uptrend, in the same way any rising moving average does. Conversely a negative value means the triple EMA is falling, suggesting a downtrend. A cross through zero is a peak or trough in the triple EMA and may suggest a trend change. Chart draws a line at the zero level.

10.44 EMA of EMA of EMA

A triple smoothed EMA is prices smoothed with an EMA then those values smoothed again with another EMA and finally a third time with a further EMA (all of the same given period).

The result is quite different from a plain EMA. It’s still a weighted average of recent prices, but whereas a plain EMA is dominated by the most recent prices, a triple EMA spreads much more broadly, and the latest few days’ influence is in fact smaller than the peak weights (at about N-days back). The following graph shows the weights for N=10.

EMA of EMA of EMA weights graph

An EMA of EMA of EMA can also be viewed directly, in the upper prices window. This can be used to see the effect its smoothing has, and may help for adjusting the period N to get a desired smoothness versus responsiveness. Note the N-day period is set separately for the two windows.

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