Indicators help forex traders make money on the exchange
An indicator such as Trix is a rather interesting project: its development is based on the popular MA - well-known moving averages. They are good at smoothing out random (random) price fluctuations - conventionally called «market noises», and thus allow you to devote more time to the leading trend in the market.
The Trix Oscillator, in turn, is distinguished by the fact that its formation is based on the exponential average, which is smoothed three times. It is this indicator that helps to remove market noises and their influence on the instrument readings. The author and developer of this indicator are Jack K. Hutson, a mathematician, a successful stock trader, and an expert in the field of financial market analytics.
Even though Trix has already changed somewhat: modern modifications and additional features have not bypassed it, it is successfully used today. The functional feature of the indicator is that its principle of operation is based on the calculation of the triple EMA.
The first step is to determine the period - the re-moving of the MA. Next, the 1st moving average is calculated (based on the closing price). Based on it, the second EMA is created, and then, already on the second meringue, the third line is formed: as a result, we get a triple EMA (smoothed), and then the price level change relative to the previous period is calculated. This indicator shows the trader the change in the triple EMA relative to the previous period as a percentage, and we can see the change in the closing price for each candle.
To achieve accuracy and efficiency in the indicator readings, you need to build an additional line - the signal line. The intersection of the indicator and signal lines will act as alerts for buy or sell. As for the settings and settings, in general, the indicator has a lot of customizable values, so it is better to leave most of the settings as default and make the necessary changes during the trading process.
The Trix indicator is a fairly effective tool, convenient in that the oscillator filters out market noises well, and allows you to filter out even the most insignificant price fluctuations, allows you to determine the absence of a trend, and provides clear information about price movement - data about the main, not a secondary trend. It is actively used by expert analysts to detect market turns. Like other similar forex oscillators, it is more rational to use this indicator in conjunction with other means of technical analysis - indicators and patterns on Forex.
The fluctuations of the instrument, on the chart, are carried out near the zero levels. From the point of view of practice, if the curve moves in a zone that is below the zero horizontal, then sellers get an advantage, and if the movement occurs above the level, then buyers have an advantage.
The Trix indicator readings differ for different values of the time interval, and the Trix lines themselves are exponential averages, for which the values of the periods are different. The fact of crossing the lines generates signals for deals. But the indicator also has other possibilities. But what does the zero-crossing indicate? Because this technical analysis tool calculates the relative change in closing prices when placing the TRIX indicator chart above the zero horizontal, the trader may think about the presence of a bullish trend, in other words, it is worth thinking about the positive development of the price.
Consequently, the crossing of the zero lines by the indicator at the rate from the bottom up will show us a buy signal, the downward crossing will tell us about the sale (at the end of each period, the price closes lower than the previous value). The only rule for effective trading, which should not be forgotten, is that you should not react to signals instantly, but it is better to double-check them and confirm them based on other methods. One of the main advantages of the indicator is effective filtering out of market noise.
Using TRIX it is possible to identify an uptrend or a downtrend, as well as a trader, can observe divergence moments. Among the shortcomings, one can single out a small delay - lag, although not very obvious.
There is also an interval dependency.