The MT4 Trix indicator weeds out the minute changes and fluctuations in the price, which are not helpful in forex trading. The Trix indicator uses arrows to give the best trading signals. Since it is an oscillator, it will depict the oversold and overbought situation. Moreover, if there is divergence in the price and indicator, they will signal a strong possibility of a reversal, making them a reliable tool for index and technical forex traders.
What is a Trix indicator?
The Trix indicator represents a triple exponential average trading chart that oscillates around zero. TRIX indicator calculates a triple exponential moving average of the logarithmic values of the price input for the current chart time frame period.
- Single-Smoothed EMA = 15-period EMA of the closing price
- Double-Smoothed EMA = 15-period EMA of Single-Smoothed EMA
- Triple-Smoothed EMA = 15-period EMA of Double-Smoothed EMA
- TRIX = 1-period percent change in Triple-Smoothed EMA
The foundation of this indicator is the smooth exponential moving average. Therefore, it helps prepare a suitable technical trading strategy for the traders.
The signals of the Trix indicator
On a EURUSD H1 chart, the oscillator and the trading arrow signals will be displayed in separate indicator windows, respectively. The yellow and aqua-colored signals depict the buy and sell signals, respectively.
Triple exponential average is a momentum oscillator that uses a smoothed exponential moving average to find the trading signals in the market. For example, if the yellow color appears on the chart, traders should take a buy position and exit the trade when the opposite signal occurs. Similarly, traders should take a sell position when the aqua-colored signal appears and leave the position when the opposite signal is displayed on the chart.
Traders can also use this indicator to determine overbought and oversold situations. Since this indicator depicts the divergence, it is reliable for traders. There is a possibility of a trend reversal if there is a divergence between the price movement and the indicator. If the price is going upward and the oscillator is going in another direction, then the reversal is imminent, and the strategy should be created according to the situation.
Traders can use Trix and Tema in combination to get good gains from their trading strategy. The MetaTrader shows TEMA in the chart window and Trix in indicator one. Their basis is the same, i.e., moving average and hence supplementary.
New forex traders will be attracted to this indicator because it shows a combination of results like divergence, oversold, and overbought situations. Expert traders can combine this indicator with the other tools included in their trading strategy. It is also easy to download.
This trader is great for filtering unnecessary data for forex traders. Whipsaws and market ripples are the number one reason for forex trading. Therefore, combining Trix and Tema can give signals that help you trade in the right direction along with the moving average. In addition, this indicator is straightforward to install and download and has adjustment options for the convenience of traders.