Trading In Tempo With TRIX by Jongseon Kim
Make entry and exit decisions using TRIX.
For profitable trading, deciding when to buy and
when to sell is one piece of the puzzle. But
another, perhaps more important piece is deciding
when to trade and when not to trade. When
you have no stocks in hand and you’re considering
purchasing some, you tend to have a more
objective perspective about the trend of the stock you’re examining. However, after buying the stock, you may
lose your objective outlook. Because of this, selling should
be weighted more heavily than buying.
In this article I will illustrate how you can use the TRIX (triple
exponential smoothing oscillator), a technical indicator developed
by Jack Hutson (publisher of STOCKS & COMMODITIES),
to help you decide when and when not to trade. For the
sake of simplicity, I will only take long positions into account.
The TRIX can be obtained by using the following
1. Select a number of periods to represent the time
frame you are trading. I recommend using five.
2. EMA1: Calculate the n-period EMA of the close.
3. EMA2: Calculate the n-period EMA of EMA1.
4. EMA3: Calculate the n-period EMA of EMA2.
TRIX = (EMA3[today] – EMA3 [yesterday])
TRIX usually has two components. The first component
is called TRIX, which is shown as a black line in Figure 1.
The second component is called the signal line, which is
shown in red on Figure 1. This is the n-period EMA of the
TRIX and is used to eliminate false signals. I often use the
value 3 as the number of periods.