Paul, TRIX displays the percent rate-of-change of a triple exponentially smoothed moving average of the security's closing price.(I wanted to add "smoothed" to your definition)
Trades should be placed when the indicator changes direction, as its an oscillator which oscillates around "zero". And yes, TRIX did coincide with the price movement you discussed, but if you notice with IOM, when the oscillator changes direction to bull from below the zero reference line, it seems to accurately predict a major upward price trend. Furthermore, when the oscillator changes directions (bull) while above the reference line, we see smaller, and shorter periods of the price movement.(opposite for bear price moves)
Keep in mind, NO oscillator indicator correctly predicts these price moves 100% of the time. But the TRIX with 12 days seems to do it about 75% of the time with IOM thus far, and its been perfect on the all the major price moves.
NVI. I use NVI as I would with price charts and trendlines. I need usually three points,(peaks/troughs) sometimes two, and I look for divergences when I draw trendlines. I don't use NVI, for daily trades or daily divergences.
Good Trading. LF |
