Indicator - TRIX
First calculate the triple (3 period) exponential moving average of the prices.
After having calculated the third moving average, calculate the percentage of variation of this data. You obtain the TRIX.
It is often used with a (9 day) moving average for smoothing purposes.
When the TRIX rises above its moving average a buy signal is announced.
When the TRIX falls below its moving average it's a sell signal. The TRIX is very valuable when there is a clear trend.
The TRIX gives good divergence signals.
A sell signal is given when a bearish divergence appears. A bearish divergence occurs when the stock price makes new highs while the TRIX fails to make new highs.
A buy signal is given when a bullish divergence appears.\n A bullish divergence occurs when the stock price makes new lows while the TRIX fails to make new lows.