Using TRiX Candles and a Keltner Channel for Trend Signals

Summary

The indicator constructs synthetic candles from four TRiX values calculated for the source instrument’s open, close, high, and low. Because TRiX is based on triple exponential moving averages, the resulting candles are described as smooth. A Keltner channel is then calculated from these TRiX-derived candles and displayed alongside them, rather than being calculated from the instrument’s raw prices.

The suggested use is to treat candle color changes as possible signals and use the channel values to filter some false signals. The description does not specify how the channel should be applied, define entry or exit rules, or provide testing results. It presents a visualization and a possible signal-filtering idea, so traders would need to evaluate its parameters and behavior on their own data before relying on it.

Key ideas

• The synthetic candles use TRiX values derived from open, high, low, and close prices.
• A Keltner channel is calculated from the TRiX candles rather than raw instrument prices.
• Color changes may be used as potential signals.
• The channel may help filter false signals, but no specific filtering rule is given.
• The document provides no backtest results or complete trading plan.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.