Using The Trix Indicator — AAX Academy

In this article we will be looking at the TRIX indicator. TRIX is an oscillator, showing whether the cryptocurrency is currently within overbought or oversold conditions.


The TRIX indicator works through the use of exponential averages in order to identify whether a cryptocurrency is overbought or oversold. We can tell whether a cryptocurrency is overbought or oversold, by the line’s position in relation to the centre line (+-0).

If the TRIX is above the centre line then the cryptocurrency is considered overbought, with the line within the green area as shown below.

BTC/USD TRIX indicator

On the contrary, if TRIX is below the centre line then the cryptocurrency is considered oversold, as shown below.

LINK/USD TRIX indicator

From looking at TRIX trends we can fish out buy and sell signals with the indicator. We find signals from the indicator by looking at historical turning points on the timeframe of our choice. For example, below we can see that the TRIX produces sell signals for BTC. These sell signals are produced when TRIX hits the value 32.4 on the hourly chart. Once the value 32.4 is hit, the sell signal is received with BTC then moving down, as shown below.


As well as providing historical sell signals, the TRIX also provides buy signals. This is demonstrated below with LINK. When TRIX hits the value -19.79 on the 4hr chart, this is a historical TRIX buy signal for LINK.


TRIX accuracy for buy / sell signals

A good measure for judging TRIX buy / sell signals, is the distance between the sell or buy value and the peak of that move. For example, the BTC sell signal is more accurate than the LINK buy signal. The way in which we calculate this is shown below.


BTC sell value = +32.4

BTC peak of moves used for data:

  • + 32.4
  • + 38.3
  • + 36.9
  • + 33.2

Average peak = (32.4+38.3+36.9+33.2) / 4 = +35.2

BTC sell value & peak difference = 38.3–32.4 = +5.9

BTC sell value & average peak difference = +2.8


LINK buy value = -19.79

LINK trough of moves used for data:

  • – 19.79
  • – 30.30
  • – 46.59
  • – 32.63
  • – 49.18

Average trough = (-30.30+ -46.59+ -32.63+ -49.18+ -19.79) / 5 = -35.698

LINK buy value & peak difference = 49.18–19.79 = -29.39

LINK buy value & average peak difference = 35.698–19.79 = 15.908

Accuracy for buy / sell signals conclusion

Due to the higher sell / buy value & average peak difference of LINK (15.908 (LINK) > 2.8 (BTC)), there is an increased possibility of LINK providing a false buy signal in comparison to TRIX BTC providing a false sell signal. Alongside this, in the historical data from the example, the data points for LINK to move further away from the average peak than BTC.

Due to the data points moving further away from the average, this increases spread, increasing the likelihood of false signals. Therefore, in this example using the BTC TRIX sell signal would be recommended due to the low deviation of data points from the average peak calculation. With LINK, the example given would not be recommended due to the high deviation of data points from the average peak. The high deviation means that the likelihood of LINK falling further on the 4hr chart after the buy signal has been released is increased.

TRIX conclusion

In conclusion the TRIX is a useful indicator to show the momentum of a cryptocurrency. As shown with the BTC example, it can also provide useful indications as a buy/sell indicator as well as showing when a cryptocurrency may be overstretched. Although like all indicators, using the TRIX alone is not recommended and should be used alongside other indicators.

Originally published at on January 23, 2021.




AAX is the world’s first digital asset exchange powered by LSEG Technology

Recommended from Medium

On Objective Value and Price

How to Buy Virtual Land in the Metaverse?

The Ten Major Downside Risks of Investing in Bitcoin

GoodGuys Digest: Edition 2

🥞 Listing timeline: $MOL will be listed on PancakeSwap 📆

Hold Mindchain (Mind) Today, To Grow your Asset.

More answers to your questions about AlgoDAO’s IDO

The Ultimate Guide to NFT Staking

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store


The world’s first crypto exchange powered by LSEG Technology.

More from Medium

Part 1 Trading on all assets.

PrivacyCards, to optimize crypto-usage in real-world transactions

Algorithmic trading strategies

Weekly Analyst Update — February 28