How to calculate TRIX

Discussion in 'Technical Analysis' started by Gasherbrum, Dec 12, 2007.

  1. Googling the internet to figure out how to calculate TRIX says:

    "To calculate TRIX, you must first pick a period with which to create an exponential moving average of the closing prices. For a 15-day period:
    1. Calculate the 15-day exponential moving average of the closing price.
    2. Calculate the 15-day exponential moving average of the moving average calculated in step #1.
    3. Calculate the 15-day exponential moving average of the moving average calculated in step #2. You now have triple exponentially smoothed the moving average of closing prices, greatly reducing volatility.
    4. Finally, calculate the 1-day percent change of the moving average calculated in step #3."

    What I don"t understand:
    1. How can you calculate an exponential moving average with a 15-day period? Do they mean a 15-day EMA (then, a = 2 / (N + 1)?
    2. To step 2+3: How can you calculate the 15- day EMA of a single number? You need a time series for that, no?
    3. I don't get the idea behind TRIX, what are its characteristics?

    I really have no clue. So thanks for helping!