The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments


Subject:  Exploring TRIX (& Exploring Oneself) Date:  2/9/2013  4:26 PM
Author:  globalist2013 Number:  34769 of 35877

Take a look at this chart. The security plotted doesn’t matter. But notice that the shorter version of TRIX has you getting out just about when the longer version would be getting you in. That divergence could be useful. The default parameters for TRIX are (15, 9) where the first value is an EMA that is then triply smoothed and the second value is a MAV of the 1-period change of that.(1) Obviously, the relationship between the two parameters is (5x, 3x). Therefore, faster (or slower) versions of TRIX can be created by varying the value of “X”. E.g., (10, 6), (30, 18), etc.

Chande puts trading-systems into one of four categories (2) according to the speed of its entry and exits. E.g, ‘Brute-force trend-following’ is characterized by slow entries and slow exits, and doing a faster entry could create an ‘Early-bird’ system. But what cannot be done is to switch between systems in mid-stream unless you want to blow up your account. Either you’ve decide you’re most comfortable trading the short-term trend, or you’ve decided that another time-frame better suits your personality. If the former, then you can’t express regrets about not having captured the profits that staying with the trade might have given you. If the latter, you can’t express regrets about the profits you gave back to the market