Choosing the time-frame is also an important factor. This system was designed initially to use daily charts for the intermediate time frame. But, this can be changed as per preference and the time-frame you are aiming to trade with should be the intermediate trend. The long-term trend is of a greater magnitude and provides an overarching view to the intermediate frame on the chart. Then, the long-term trend would have a weekly chart while the short-term trend would have a shorter magnitude.

The Triple Screen Trading system utilizes a combination of indicators and multiple timeframes. Furthermore, it also uses a tight stop-loss to implement discipline with money management. Here is a table to summarize the action that a trader should take depending on the combination of the intermediate and the larger trend. At its core, the Triple Screen Trading system is a trend following system. This is because following the trend is its basic trading principle.

The first two screens help you understand where the market is headed, while the third screen allows you to time your entry better.

The Triple Screen system can be applied to different time frames depending on your trading style. Traders should realize that there is no single perfect trading methodology. Although there will be specific situations in which certain methods are applicable, the trader must understand when this trading strategy would be inapplicable. But, the basic idea is to use several filters to come to a decision and multiple indicators to make your trades.

Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Skip to main content Skip to secondary menu Skip to primary sidebar Skip to footer Best Managed Accounts Forex Robots Forex Brokers Forex Signals Social Trading Platforms. Robots Start Guide Glossary Basics Currency Pairs Charts Candlesticks Trading Tips Strategies Technical Analysis Fundamental Analysis Day Trading Scalping Swing Trading Trend Following News Reviews Forex Robots Forex Brokers Mustreads Crypto Trading.

First Screen This is a long-term time frame that is used to recognize the bigger picture. Second Screen The second screen is the daily chart of the Triple Trading System. The risk-free nature of demo trading allows you to discover what is effective via trial and error, while still using genuine live market prices.

Click the banner below to open your FREE demo trading account today and test your best trading strategies! Once the first screen identifies the direction of the tide, this is the only direction in which you will be allowed to trade when looking at your intermediate chart.

So if your trend indicator signals that it is an uptrend, you can only buy. If it says the tide is flowing in the direction of a downtrend, you can only sell. Once we know the direction of the tide, we are looking for a wave in the contrary direction on our intermediate chart that will give us a beneficial entry.

Let's suppose that you are looking at a daily chart as your intermediate time frame, and the weekly chart shows that the larger trend is upward. You are now looking for a daily decline which would provide you with an advantageous opportunity to buy the market. We would do this by searching for a buy signal from our oscillator of choice on the daily chart. Any sell signals in this case would be ignored because the uptrend from the first screen has already filtered those out.

We move to the third screen once we get agreement from the first and second screen: that is, when the larger trend is up, and an intermediate decline has generated a buy signal from our oscillator, or when the larger trend is down and an intermediate rally has generated a sell signal.

The third screen is a technique using a trailing stop to determine the specific entry point. If we are aiming to go long in the market with a daily chart used in the second screen, we use a trailing buy-stop one tick above the high of the previous day.

If we are aiming to go short, we use a trailing sell-stop one tick below the low of the previous day. Let's suppose that the weekly trend is up, and a daily decline has issued an oversold signal from your oscillator i. a buy signal. You would then place a buy stop one tick above the high of the previous day. If the market resumes its uptrend and hits your stop, you will go long on the market.

If the market continues to decline, your stop will be deactivated. You would then trail your stop by dropping it to one tick above the high of the day just passed. You would keep trailing until activated, or until you see the weekly trend change direction. As the system was originally designed to use weekly charts for the tide and daily charts for the wave, those will be the time frames we'll use as an example.

Source: Admirals MetaTrader 4 , EURUSD, Weekly - Data range: from Oct 14, to Sept 6, , accessed on 20 July at BST. The slope of the MACD histogram, which appears beneath the main price chart, indicates to us the trend of the tide. An upward slope suggests an uptrend, and a downward slope suggests a downtrend. A key buy signal is when the indicator turns upward from beneath the centreline.

A key sell signal is when the indicator turns downward from above the centreline. We can see in the graph below that the MACD crosses up above the centreline. We'll use this period for our example and proceed to apply our second screen. We are using a daily chart for our intermediate time frame. Source: Admirals MetaTrader 4 , EURUSD, Daily - Data range: from Dec 27, , accessed on July , at BST. The first oscillator is a two-day EMA Force Index.

The second oscillator is the Stochastic oscillator, using default values. The Force Index displays buying opportunities when it falls below its centreline, and selling opportunities when it rises above the centreline.

The Stochastic oscillator displays buying opportunities in oversold areas below 30 and selling opportunities in overbought areas above As the weekly trend was up in May, we can only pay attention to buy signals during this period.

At this time, we have the Force Index below 0, meaning that we could proceed to our third screen if this was the oscillator we were using. The RSI , however, does not show an oversold condition at this time. If we were using an RSI, we would take no action. For our third screen, if we were following the buy signal from the Force Index, we would then place a stop to buy. We would keep trailing the stop lower until either we open a position, or the weekly trend changes.

If we open a position, we use a tight stop-loss order to manage our risk. This would go one tick below the high of the trade day or the previous day — whichever is lower. Conversely, for short positions, you would place a stop-loss one tick above the high of the trade day or the previous day — whichever is higher.

If the market moves in your favour, you should move the stop-loss to your break-even level. A good way to decide whether this system works for you is by backtesting. The opposite can be applied when the market is in a downtrend. When the market is trending, trend indicators can perform best, but when the markets start ranging, they could produce false signals.

Similarly, for ranging markets, oscillators may work best to spot overbought and oversold conditions, but when the market comes in the trend, they could show flaws.

Some traders tried to trade an average of the buy and sell signals generated by multiple indicators. But, this strategy flopped. If buy signals from oscillators are more dominant than trend indicators, then as expected, the trader would select signals from oscillators. And as mentioned in the above argument, oscillators perform best in ranging markets and not when the market is trending. So, Dr. Elder developed a trading system that eliminates simple averaging problems combined with the best trend and momentum indicators.

As Dr. Elder was associated with medical sciences, he gave this system a name Triple Screen based on the Triple Marker Screen Test. Some people confuse the terminology Triple Screen with three screens.

However, the system involves applying three tests on every trade with trend and momentum indicators. Trend indicators can present different signals on different timeframes. For example, an indicator may show buy signals on the 5-minute chart while displaying sell signals on the daily chart. To solve this problem, a trader can divide timeframes into units of five.

For example, in day trading , there are 5 to 6 trading hours. A trader can divide each hour into five segments. The Triple Screen trading system combines trend-following indicators with oscillators in a way that is designed to take advantage of their strengths, while filtering out those occasions when they perform badly.

Dr Alexander Ray recommended using the Force Index and the Elder-ray as oscillators. He also suggested the Stochastic and the Williams Percent Range indicators as oscillators that would work well with the system. One way to implement the Triple Screen system is to trade with the trend. The system divides timeframe of the trend into three sections:. Using trend indicators, a trader would look for the long-term trends by dividing timeframe into five segments. Then, he would apply these indicators to the intermediate timeframe.

Most beginner traders look for a single indicator that can help them make big profits. They may find one that helps them make profits but as soon as the losses come in, they look for another indicator. This is the wrong way of approaching indicators since none of them is designed to provide a flawless market prediction. They are not even designed to correlate with each other. Instead, they are meant to be used in combinations, while complementing other indicators, even in situations when they contradict each other.

Developed by Dr. Alexander Elder, the Triple Screen Trading System utilizes multiple indicators to filter out opposite trading signals for the same market. In this article, we go through this system in detail and explain the indicators that are used in this system. This allows traders to use a three-tier approach when making a trading decision.

To use this system, traders first decide the time frame. Whatever the chosen timeframe may be, there will be two more timeframes related to it — a higher timeframe, which provides a broader context of the market; and a lower time frame that provides a close-up view of the situation, thus giving you the chance to pick a precise entry point. This is a long-term time frame that is used to recognize the bigger picture.

This is where traders look to develop a bias. But, in order to recognize the trend, we have to utilize a trend-following indicator such as the MACD indicator. But, the first screen identifies only the direction of the trade in which you will be trading. This means that you can only buy if there is an uptrend and sell if there is a downtrend. The second screen is the daily chart of the Triple Trading System. As soon as the direction of the tide is known, we look for a daily swing in the contrary direction of the weekly chart to provide us with a beneficial entry.

Let us take for example that we are looking at the daily chart as the intermediate time frame while the weekly chart tells us that the larger trend is upward.

Now, we are looking for a daily decline that would give us the opportunity to buy the market. This is done by searching for a buy signal using oscillators to spot overbought and oversold conditions. Therefore, if we have a Bullish weekly chart, the system will focus on the bearish retracements on the daily chart only, looking for oversold conditions.

As soon as we get agreement from the first two screens — that is, there is an uptrend and an intermediate decline has produced a buy signal or there is a downtrend, and intermediate rally has produced a sell signal — we move to the third screen. This screen is unique in that it determines the precise entry point using the trailing stop technique. Let us assume that there is a weekly uptrend and that the intermediate decline has issued a buy signal. If the market hits your stop in the uptrend, you will go long.

If it declines, the stop will be deactivated. Keep trailing until there is a change in the direction of the weekly trend. This is because oscillators perform well in range-bound markets and trend-following indicators are suited to trend markets.

However, the Triple Screen Trading system combines oscillators with trend-following indicators in such a way that it benefits from their strengths while getting rid of all their disadvantages.

Some of the recommended oscillators that would work well with the system are as follows:. Relative Strength Index RSI can give a fairly precise indication of the market strength and times when it is safe to open position. Conflicting signals can be a challenge to interpret since a trend depends on the time-frame of choice.

For instance, there may be an uptrend in a daily chart but a downtrend in a four-hour chart. This challenge is resolved with the Triple Screen Trading System that forces the trader to consider all three trend lengths. Choosing the time-frame is also an important factor. This system was designed initially to use daily charts for the intermediate time frame. But, this can be changed as per preference and the time-frame you are aiming to trade with should be the intermediate trend.

The long-term trend is of a greater magnitude and provides an overarching view to the intermediate frame on the chart. Then, the long-term trend would have a weekly chart while the short-term trend would have a shorter magnitude. The Triple Screen Trading system utilizes a combination of indicators and multiple timeframes.

Furthermore, it also uses a tight stop-loss to implement discipline with money management. Here is a table to summarize the action that a trader should take depending on the combination of the intermediate and the larger trend. At its core, the Triple Screen Trading system is a trend following system. This is because following the trend is its basic trading principle.

The first two screens help you understand where the market is headed, while the third screen allows you to time your entry better. The Triple Screen system can be applied to different time frames depending on your trading style. Traders should realize that there is no single perfect trading methodology.

Although there will be specific situations in which certain methods are applicable, the trader must understand when this trading strategy would be inapplicable. But, the basic idea is to use several filters to come to a decision and multiple indicators to make your trades. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment.

Skip to main content Skip to secondary menu Skip to primary sidebar Skip to footer Best Managed Accounts Forex Robots Forex Brokers Forex Signals Social Trading Platforms.

Robots Start Guide Glossary Basics Currency Pairs Charts Candlesticks Trading Tips Strategies Technical Analysis Fundamental Analysis Day Trading Scalping Swing Trading Trend Following News Reviews Forex Robots Forex Brokers Mustreads Crypto Trading. First Screen This is a long-term time frame that is used to recognize the bigger picture. Second Screen The second screen is the daily chart of the Triple Trading System.

Third Screen As soon as we get agreement from the first two screens — that is, there is an uptrend and an intermediate decline has produced a buy signal or there is a downtrend, and intermediate rally has produced a sell signal — we move to the third screen.

Some of the recommended oscillators that would work well with the system are as follows: Force Index Elder-ray Stochastic Indicator Williams Percent Range Indicators Relative Strength Index Relative Strength Index RSI can give a fairly precise indication of the market strength and times when it is safe to open position. Adding RSI to the chart window is given below: Conflicting signals can be a challenge to interpret since a trend depends on the time-frame of choice.

Closing Thoughts The Triple Screen Trading system utilizes a combination of indicators and multiple timeframes. Leave a Reply Cancel reply Your email address will not be published. Footer Forex Broker Reviews. Forex Robot Reviews.

Elder's Second Screen. Now you can trade with MetaTrader 4 and MetaTrader 5 with an advanced version of MetaTrader that offers excellent additional features such as the correlation matrix, which enables you to view and contrast various currency pairs in real-time, or the mini trader widget - which allows you to buy or sell via a small window while you continue with everything else you need to do. The indicator is invented by Larry Williams, a commodity trader who also deals in the forex and stock market. Based on the standard of triple screen trading strategy, the third screen is used for placing the trading positions, either buy or sell orders, depending on the analysis on the first and the second screen. It utilises multiple trading indicators as a means to filter out contradictory trading signals. The concept of these different time frames play a part in the Triple Screen method, as we will discuss in the next section.

Categories:

• Forex
• Binary Options
• Forex Bitcoin
• Binary Options online
• Forex Brokers