# What Is the TRIX Reversal Trading System?

## Chart Settings

The TRIX reversal trading system uses a bar or candlestick price chart based on a short-term timeframe, from 1–5 minutes, with a short-term TRIX, between 3–15 bars, using the typical price as its input (the average of the high, low, and closing prices of each bar). The trade is based on the TRIX reversing its direction, which indicates that the price has started moving in the opposite direction.

## TRIX Explanation

The TRIX is calculated using a triple smoothed exponential moving average, which is the same as three consecutive exponential moving averages. The TRIX value is the difference between the previous and current moving average values and is displayed as a value above and below a zero line. When the TRIX is above the zero line, the price has upwards momentum, and when the TRIX is below the zero line, the price has downwards momentum.

The following step-by-step tutorial of the TRIX trading system uses the NQ (NASDAQ 100) futures market, but the same steps should be used on whichever markets you are trading with this system. The example charts are 3-minute bar charts, with a 9-bar TRIX of the typical price.

## Open a Chart

Open a 3-minute OHLC (Open, High, Low, and Close) bar chart.

Add a 9-bar TRIX of the typical price—calculated by adding together the High, Low, and Close, and then dividing that amount by 3. If you are using Sierra Chart (or other charting software that allows you to color the TRIX bars), color the bars green when the TRIX is moving upwards, and red when the TRIX is moving downwards. The color difference will make it easier to identify when the TRIX has changed direction.

## Wait for the TRIX Reversal

Wait until the TRIX changes direction, which should be indicated by the TRIX bars changing color. For example, if the TRIX was moving upwards (its bars were green), and it starts to move downwards (its bars change to red), then the TRIX has changed direction, and vice versa for the opposite direction.

Enter your trade when the high or low of the entry bar (the price bar where the TRIX changed its direction) is broken by a subsequent bar.
On the example chart, the first trade is a long trade because the TRIX reversed upwards (turned green), and the high of the entry bar (shown in white) was broken by the next bar. The second trade is a short trade because the TRIX reversed downwards (turned red), and the low of the entry bar (shown in white) was broken by the next bar.