What exactly is the TRIX oscillator?

The TRIX oscillator is based on a triple smoothed exponential moving average. First, start with a regular 15-period EMA. Second, take the 15-period EMA of the regular EMA. This is the double smoothed EMA. Third, take the 15-period EMA of the double smoothed EMA. This is a triple smoothed EMA. The TRIX is based on this triple smoothed EMA. The last step is to measure the 1-period Rate-of-Change in this triple smoothed EMA. The 15-period triple smoothed EMA is moving higher when the 1-period ROC (15-period TRIX) is positive. Conversely, the 15-period triple smoothed EMA is moving lower when the 1-period ROC (15-period TRIX). In short, the TRIX tells us the direction of this triple smoothed EMA.

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Movements in the TRIX are quite similar to those in MACD or the Percent Price Oscillator (PPO), only smoother. This, of course, comes from the triple smoothing of the EMA. The chart above shows QQQ with TRIX (15,9) and the PPO (12,26,9). Notice that both use a 9-period EMA as a signal line. The TRIX is a lot smoother and produces fewer signal line crossovers. Smoothness comes at a price though. These signals are also a few days later than the MACD signal line crossovers. The difference between these two oscillators highlights the eternal conundrum for technical analysis. Faster oscillators produce quicker signals, but generate more whipsaws. Slower oscillators produce fewer whipsaws, but have more lag. Finding the golden middle is the challenge.