Elder, Dr. Alexander - Triple Screen Trading System

Dr. Alexander Elder outlines the triple screen trading system which uses three different timeframes - long term, intermediate, and short term - to identify trading opportunities. The long term timeframe is used to determine an overall market trend. The intermediate timeframe is then used to identify deviations from the long term trend. Finally, the short term timeframe identifies specific entry points by placing a buy or sell order based on the signals from the first two screens. The order is then adjusted according to subsequent price action until the trade is executed or the long term trend reverses.

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Elder, Dr. Alexander - Triple Screen Trading System

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Adrian Morar

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Dr.

Alexander Elder
Triple screen trading system
The factor of five in choosing timeframes. Decide which timeframe you want to trade and call that
intermediate timeframe. The long-term timeframe will be 5 times longer and the short-term timeframe 5
times shorter than the intermediate timeframe.
First Screen (long-term timeframe) ar!et Tide
The first screen uses trend-following indicators to identify a long-term trend. The original system uses the
slope of the MACD-Histogram to identify the market tide. The slope is defined as the relationship between
the two latest bars. The upturns and downturns that occur aboe or below the centerline gie better signals
than the opposite. !ou could also use a simple "# candles e$ponential moing aerage to define where the
trend is going. The principle is the same% first screen enables you to decide if you will go long or short on
second screen.
Second Screen (intermediate timeframe) ar!et "ave
The second screen applies oscillators to the intermediate timeframe chart in order to identify deiations
from the first screen chart. &hen the long-term timeframe trend is up' intermediate timeframe declines
point to buying opportunities. &hen the long-term timeframe trend is down' intermediate timeframe rallies
point to shorting opportunities. (orce inde$ and )lder-ray are good oscillators to use with Triple *creen'
but *tochastic and &illiams+, also perform well.
Third Screen (short-term timframe) #ntraday $rea!o%t
The third screen uses intraday price action to pinpoint entry points. The third screen does not re-uire a chart
or an indicator. .t uses a trailing buy-stop techni-ue when the long-term timeframe trend is up while the
intermediate timeframe is down to catch upside breakouts. /n the other side' it uses a trailing sell-stop
techni-ue when the long-term timeframe trend is down while the intermediate timeframe is up to catch
downside breakouts.
So technically& 'hen the conditions yo% are loo!ing for are met on the First and on the Second
Screen& place a (%y (or a sell order) on the third screen one tic! a(ove (or (elo') the high (or the
lo') of the last closed candle on the #)TE*ED#ATE TE* T#EF*AE.
+eep moving yo%r (%y-stop (or sell-stop) for each s%(se,%ent candle %ntil stopped in or %ntil the
trend on the long-term timeframe reverses therefore cancelling its initial signal.