Website focused in Forex education which contains information about the Forex market, Forex brokers, Forex autotrading, Binary Options and many more. However, there have been other experts who have tried to develop with some success automated trading systems using this trading system to trade in markets such as Forex.

This method is based on the careful selection of a triple time frame that allows the trader to make a reliable diagnosis of the main trend in the market that he is analyzing, so that he can take maximum advantage of the medium amplitude cycles and the erratic intraday movements with the objective to open positions in the market more safely.

In this trading technique the first screen is used to detect the amplitude and direction of the main trend. In the other hand, the second screen is used to catch the "wave of the market".

According to Elder, the scaling relationship between these three time frames should be as close as possible to a factor of 5 or more. While this number has nothing in particular it seems that is the one that best approximates the results of other classic studies of trends made by Robert Rhea and Charles Dow. Thus, for example, the traders who work with daily charts should be use as the first screen a weekly chart in order to filter out the noise of the daily movements.

Triple Screen Trading System - Part 5

For the third screen in this case it is best to work with 1 hour charts whose usefulness will be to refine the time when entering the market. This trading technique can be used in any market including Forex. The traders can set different combinations of time frames depending on their trading style.

However, the followers of daytrading can use the next combinations: For each screen chartElder often use different technical indicators to confirm the trend in each of them and reinforce the signal.

These indicators are the following: Once we get into the market, we place protective stops according to the following rules: This trading technique of Alexander Elder is an interesting approach because it takes into account the different movements and market trends presented in different time frames. Usually, most traders use just one screen and one or two indicators to trade in the market. The problem is that a single chart and indicator can not cover all eventualities that may have the market.

Even the most advanced indicators are unable to work all the time because the market is very complex. The advantage of the Elder trading system is that the market undergoes not one, not two, but three unique tests, or screens, to every trading decision. These tests are formed by a combination of trend-following indicators and oscillators.

The system is designed in such way that it counteract the failures of individual indicators and at the same time it serves to detect the market's inherent complexity. In this case we assume that we trade based in 1 day charts so the settings of the three screens are as follows: This is the screen 1 in which we use a weekly chart and a MACD histogram which are used to detect the amplitude and direction of the trend. This is the screen 2 in which we use a daily chart which serves to catch the "wave of the market".

Triple Screen Trading System - Part 1

In this case we use short-cycle oscillators that allow to take advantage of counter-trend movements. This signal is shown especially by the stochastic. Finally, the third screen is a 1 hour chart which uses as the main indicator the Force Index to catch the "tip of the wave".

In this case, this indicator is smoothed with a EMA of 2 periods. This chart is used by the trader to decide at what point he will enter the market and where he will fix the stop loss and the take profit points of the position. However, because the Force Index is practically zero, the trader must wait for the market to make the final break before opening a position.

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Paypal Payza Skrill CashU Neteller. Receive New Content In Your E-mail. Triple Screen Trading Technique — Alexander Elder. If the first screen presents an uptrend and the oscillators of the second screen indicate an oversold market, the trader should open a long position if the oscillator of the third screen shows an oversold market too and the price is above the maximum of the day or the previous session.

Related Posts RSI plus stochastic trading technique Trading Technique with ADX Trading Technique Based on Moving Averages and MACD Inram Sait scalping method Chimpanzee Cross Trading Technique The Schiff Pitchfork.

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Trading Instruments This trading technique can be used in any market including Forex. Indicators The traders can set different combinations of time frames depending on their trading style.

Short cycle oscillators in order to take advantage of counter trend movements that present the best opportunities to open a position in the market. Trading System Rules -If the first screen presents an uptrend and the second screen shows a movement against that trend, the trader should open a long position at the precise moment that third screen shows that the time is right. If the first screen presents a downtrend and the oscillators of the second screen indicate an overbought market, the trader should open a short position if the oscillator of the third screen shows an overbought market too and the price is below the minimum of the day or the previous session.

If we open a long position, the stop loss should be placed somewhere below the minimum of the day or below the minimum bar or candle of the previous day, whichever is lowest. If we open a short position, the stop loss should be placed somewhere above the high of the day or above the high bar or candle of the the previous day, whichever is the highest. If the trade is developing in our favor, we can move the stop loss to break even.

Traders that trade in the long-term, should remain on the market until the trend of the first screen change or the stop loss is executed. The trader must never move back the stop on the belief that the market is having only a correction, you should always protect the profits.

Triple Screen Trading System - Part 3

For example, if the first screen shows a clear uptrend and the oscillator of the second screen is in the oversold area, the trader should open a long position which should be closed when the oscillator reaches the overbought zone. Additional Notes About This Trading System This trading technique of Alexander Elder is an interesting approach because it takes into account the different movements and market trends presented in different time frames.

Example of the application of the technique of the triple screen In this case we assume that we trade based in 1 day charts so the settings of the three screens are as follows: First Screen This is the screen 1 in which we use a weekly chart and a MACD histogram which are used to detect the amplitude and direction of the trend.

Second Screen This is the screen 2 in which we use a daily chart which serves to catch the "wave of the market".

Third Screen Finally, the third screen is a 1 hour chart which uses as the main indicator the Force Index to catch the "tip of the wave".

More trading techniques Related Posts RSI plus stochastic trading technique Trading Technique with ADX Trading Technique Based on Moving Averages and MACD Inram Sait scalping method Chimpanzee Cross Trading Technique The Schiff Pitchfork December 20th, Tags: Trading Resourses, Trading Strategies Leave a Reply Cancel reply document.

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