Many traders who use graphical indicators choose **technical analysis** to identify trends and certain entry and exit points for trades. Among the various indicators available, there is the oscillators category - so called because they use moving averages to add value to the decision-making process and oscillate around an axis. Some of the best known indicators in this category are **MACD, Price Oscillator** and **Stochastic RSI**. In this article we will cover the principles and workings of the oscillator indicator **Trix** and its derivative **TrixM**.

### Trix

Created in the 1980s by Jack Hutson, who at the time was editor of the Technical Analysis of Stocks and Commodities magazine, the **Trix indicator smoothes out false signals of price changes**, as occurs with simple moving averages. In order for that to happen, **three exponential moving averages** are performed over a number **N** of intervals, which explains the origin of the name **tri**ple e**x**ponential average. Finally, the percentage difference between the values of the N and N-1 averages is performed, resulting in the indicator value. In summary, the following steps are:

**EMA1**(exponential moving average) of**N intervals**over the asset’s closing price.**EMA2**over the values of EMA1 for N intervals.**EMA3**over EMA2 for N intervals.**Percentage price difference**between N and N-1 using**EMA3**.

This calculation’s result is a triple average that is less susceptible to sudden price fluctuations, showing market **trends** more clearly and facilitating decision-making. However, the indicator **should not be used by itself** in an analysis but a tool to aggregate in the technical analysis of a certain asset.

### And how can I put it to use?

The first most common use is as a **trend moment** when crossing the indicator’s 0 line.

Simply put, **positive Trix values will indicate buy, and negative values will indicate sell**. In the example below, we’ve inserted a resistance line in the indicator window to highlight the 0 line. The cryptoasset in question is BTC, with a 5-minute periodicity.

The** second way** of using it is with a short exponential moving average, called a **signal**. In this case, when the indicator **crosses the average upwards**, it would be a **moment of buying**, and when c**rossing it downwards**, it would be an **indication for selling**. Although this second way is quite popular, it tends to indicate more wrong signals in the analysis.

In the **example below**, we’re using a red 9-interval exponential moving average signal next to the 15-interval **Trix** indicator on ETH/USD with a 60-minute periodicity.

### TrixM

It is a variation of the **Trix** indicator itself, being a **variation rate in relation to the previous candle**. In other words, the **TrixM** value will be the **difference** between the Trix value for the **current and the previous candle**.

It helps to realize the **intensity** of the indicator movements. In the example below, the 11 o’clock candle has a **Trix value of 0.12 and 0.01 TrixM**.

**And what does it mean?** Between the current and the previous candle, there’s been a **variation of 0,11** in the indicator’s result, that is, we can **deduce that the 10 o’clock’s candle value of Trix is 0,11**.

The calculation could also be considered in the following formula: **TrixM = Trix - Trix[1]**

TrixM = 0,12 - 0,01

TrixM = 0,11

This way, **TrixM** will show how the Trix value is varying. Values closer to** zero** will indicate **smoother** variations, while values **farther away** are a sign of **sharp variations** in the indicator. Added to Trix's own analysis, both can bring important signs of market **trends and reversals**.

### How do I add it to Vector?

**Right-click the chart** > click on **Add Indicador**. Both indicators will be in the **Oscillator** subgroup, but you can also search directly for Trix:

The properties, such as number of intervals and **type of average**, can be altered by **right-clicking** the indicator’s name once it has been added to the chart. It’s also possible to insert an internal **moving average** in case you wish to use it as a **signal**.

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