Ever notice how most technical indicators and statistics were invented in the 60s, 70s, and 80s? I think it’s because traders who wanted an edge had to do the dirty work, crunching numbers and coming up with new models. Today, we can just go online and find everything we need to about a stock: it’s all right there for us.
I wouldn’t go back to the pre-Internet age for anything, and I’m sure you wouldn’t either, but with the ease of the ‘net, some traders have gotten lazy. Not only do they no longer have to do the hard work of calculating stats and hand-drawing out charts themselves, many of them are too lazy to even master all of the technical indicators that are out there and freely available!
This is a mistake — but it also presents an opportunity. Since the Internet has “lowered the bar,” we need to do less to get an edge these days. We no longer have to crunch numbers or even develop our own models: we just have to learn how to use the existing models, and we’ll already have an edge on the competition. If you’ve been watching TradingTips.com videos for a while, you’ve already mastered more indicators than most — but here’s another one to add to your repertoire: the TRIX indicator.
In this episode, you’ll learn:
- What TRIX is, where it comes from, and what its purpose is (0:38)
- The formula for calculating TRIX — you won’t need to do it by hand, but it pays to know and understand it! (1:17)
- How to use TRIX with both the zero line and an additional signal line (1:59)
- How you can add TRIX to your own charts (3:08)
The video also contains an in-depth example of a real stock chart with a TRIX underlay.
In conclusion, TRIX is a momentum indicator oscillator that’s “triple smoothed” to remove so-called market noise. It’s best to use it with an indicator line, which can help you establish buy and sell points. And with StockCharts.com, making your own charts with the TRIX indicator underlay is easy.
Happy Trading!
Manny Backus
CEO, Wealthpire Inc.
P.S. Next week we’ll look at The Ultimate Oscillator: yet another tool for determining if a stock is overbought or oversold. See you next week!
Episode 55 – T-R-I-X: A Momentum Indicator
