Monday, February 12, 2007

 
Technical Indicators

TRIX - Triple Exponential Moving Average

The Triple Exponential Moving Average (TRIX) is an oscillator used to identify oversold and overbought markets as well as a momentum indicator. For use as an oscillator look for a positive value to indicate an overbought market and a negative value indicate an oversold market. When TRIX is used as a momentum indicator, a positive value suggests increasing momentum just as a negative value suggests momentum is decreasing. Some believe that the TRIX crossing above the zero line is a buy signal and a closing below the zero line is a sell signal. Divergence between price and TRIX can also indicate significant turning points in the market.

Two advantages of TRIX over other trend indicators is its filtration of market noise and a tendency to be a leading rather than a lagging indicator. By using triple exponential smoothing, "insignificant" cycles are filtered out. It can lead a market because it measures the difference between each bar's smoothed version of the price information. When used as a leading indicator, TRIX is best used in conjunction with another market-timing indicator so as to reduce false signals...

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