Triple Exponential (Trix)

The Triple Exponential study displays the momentum of the result found by processing data through three passes of exponential smoothing.

The article "Good Trix - Triple Exponential Smoothing Oscillator" by Jack K. Hutson describing the Triple Exponential appeared in the July/August 1983 issue of Stocks & Commodities. The article explains, "When using exponential smoothing you are averaging past values of a time series in an exponentially decreasing manner. Alpha is usually used to represent the fractional value that past data is weighted, with most recent data having the most impact or weight, and each preceding days data having exponentially less impact."

The level of exponential smoothing "Alpha" is calculated by the system for the period (N) entered for the Triple Exponential, where Alpha = 2/(N+1).

The article goes on to explain, "Taken by itself, triple exponential smoothing could tend to over-react to random market movements. This is the reasoning behind plotting the derivative (one day momentum) of the triple exponentially smoothed data."

One method of identifying turning points is the use of Trix step theory and Divergence. The chart below shows a 14-period Trix with the Divergence-based studies. There are 3 signals on the S*P in 2008.

Triple Exponential Parameters

Parameter	Description
Display	Opens sub-window to set parameters • Color = Line color. • Weight = Line thickness. • Display = Line style: line or histogram. • ShareScale = Determines whether sharing of the vertical scales between studies is accepted. Auto = System determine whether sharing is feasible. On = Scale is shared regardless of the functions and studies displayed. Off = Scale is not shared. ShareScale must be On if study is overlaid on a study with multiple outputs.
MarkIt	Opens Specify Conditions window.
Price	Number of bars in the lookback range.
Period	Price used to calculate study values.
OB/OS	Opens sub-window with overbought and oversold parameters: • Color = Select a color for the line. • Weight = Choose a thickness for the indicator. • Type = Choose fixed or dynamic. Fixed = uses Level as a fixed OB/OS value. Dynamic = uses Standard Deviation and Lookback for a dynamic OB/OS value:. OB: MA(@,Sim,lookback) + factor * STDDEV(@,lookback) OS: MA(@,Sim,lookback) - factor * STDDEV(@,lookback) where @ is the study • Std Dev = Multiplier used to calculate high and low. • Lookback = Number of bars to compare to the current bar. • Level = Percentage of average OB/OS used to calculate predictor Ob/OS levels. • Display = Click this check box to display the component. • Style = Choose a line style.