The ( ) indicator is a strong tool. It can help investors determine the price momentum and identify oversold and overbought signals in a financial asset. Jack Hutson is the creator of the indicator . He created it in the early 1980s to show the in a triple exponentially .
When used as an oscillator, it shows a potential peak and trough price zones. A positive value tells traders that there is an overbought market while a negative value means an oversold market. When traders use as a , it filters spikes in the price that are vital to the general dominant trend.
A positive value means momentum is rising while a negative value means that momentum is reducing. A lot of analysts believe that when the crosses above the zero line it produces a buy signal, and when it closes below the zero line, it produces a sell signal.The indicator has three major components:
- Zero line
- TRIX line (or histograms)
- Percentage Scale
The indicator determines overbought and oversold markets, and it can also be a . Just as it is with most oscillators, oscillates around a zero line. Additionally, divergences between price and can mean great turning points in the market. calculates a of the log of the price input. It calculates this based on the time specified by the length input for the current bar.
Trading indicator signals
Zero line cross
can help determine the impulse of the market. With the 0 value acting as a centerline, if it crosses from below, it will be mean that the impulse is growing in the market.Traders can, therefore, look for opportunities to place buy orders in the market. Similarly, a cross of the centerline from above will mean a shrinking impulse in the market. Traders can, therefore, look for opportunities to sell in the market.
Signal line cross
To select the best entry points, investors add a signal line on the indicator. The signal line is a moving average of the indicator, and due to this, it will lag behind the .A signal to place a buy order will occur when the crosses the signal line from below. In the same way, a signal to place a sell order will come up when the crosses the signal line from above. This is applicable in both trending and ranging markets.In trending markets, a signal line cross will indicate an end of the price retracement, and the main trend will resume. In ranging markets, a signal line confirms that resistance and support zones have been upheld in the market.
Traders can use the Triple Exponential Average can to identify when important turning points can happen in the market. They can achieve this by looking at divergences. Divergences happen when the price is moving in the opposite direction as the indicator.When price makes higher highs but the makes lower highs, it means that the up-trend is weakening, and a reversal is about to form. When the price makes lower lows, but the makes higher lows, it means that a reversal is about to happen. and divergences happen when the security and the indicator do not confirm themselves. A can happen when the security makes a lower low, but the indicator forms a higher low. This higher low means less downside momentum that may foreshadow a reversal. A divergence happens when the commodity makes a higher low, but the indicator forms a lower high. This lower high indicates weak upside momentum that can foreshadow a reversal sometimes. divergences do not work well in strong uptrends. Even though momentum appears to be weakening due to the indicator is making lower highs, momentum still has a bias as long as it is above its centerline.When and divergences work, they work very well. The secret is to separate the bad signals from the good signals.
RXval --> new indicator.
AvgTRX --> average of new indicator.
This is a Level 1 free and open source indicator.
Feedbacks are appreciated.
USDT TRC20: TWVYATJFN7SsbrmH8jLVrWHaV2aNruvvcT
USDT ERC20: 0xfd4d0eb131e81f44530849c1a966cb261dd6bda2