Trading Multiple Time Frames Like Professional Traders (The Triple Screen System)

Trading Multiple Time Frames Like Professional Traders (The Triple Screen System)

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Many traders adopt a single screen or indicator
that they apply to each and every trade. In principle, there is nothing wrong with
adopting and adhering to a single indicator for decision making. In fact, the discipline involved in maintaining
a focus on a single measure is related to the trader’s discipline and is, perhaps, one
of the main determinants of achieving success as a trader. But what if your chosen indicator is fundamentally
flawed? What if conditions in the market change so
that your single screen can no longer account for all of the eventual outcomes operating
outside of its measurement? The point is, because the market is very complex,
even the most advanced indicators can’t work all of the time and under every market condition. For example, in a market uptrend, trend-following
indicators rise and issue “buy” signals while oscillators suggest that the market is overbought
and issue “sell” signals. In downtrends, trend-following indicators
suggest selling short, but oscillators become oversold and issue signals to buy. In a market moving strongly higher or lower,
trend-following indicators are ideal, but they are prone to rapid and abrupt changes
when markets trade in ranges. Within trading ranges, oscillators are the
best choice, but when the markets begin to follow a trend, oscillators issue premature
signals. This is why alexander elder came up with the
triple screen system. The triple screen system was first proposed
by elder as a stock trading strategy – but it’s regularly used in forex and other markets
as well. So, what is the triple screen? Triple screen is essentially a trend following
system, but the main characteristic, is that it works by analyzing charts at multiple timeframes. The root of elder’s triple screen is that
it tries to time trade entries to coincide with market corrections or pullbacks. These can happen in both bull trends and bear
trends. The strategy only buys or sells when the signals
between different screens at different timeframes are in agreement. Here are the steps you should follow if you
want to implement the triple screen: The first step is to choose which charts to
use. Most traders who use triple screen choose
a time ratio of between 3 and 5. This means that the period of each chart reduces
by a factor of 3, 4 or 5 from the longest duration chart to the shortest duration chart. If the long range chart is the weekly, we
divide by 5 to get the tactical chart, then by 5 again to for the executional chart. If the exact period chart doesn’t exist
on applying this rule, the closest one is used. If you prefer to hold your trades longer,
you might use the weekly, daily and h4. For swing traders, the daily chart, the 4h
and 1 hour charts are best suited. The 4 hour, 1 hour and 15 minutes are perfect
if you prefer day trading. Choosing the right chart set depends on your
trading goals. If you are a buy and hold, or sell and wait
trader, then a longer range setup is perhaps going to be the best choice. If you trade intraday on the other hand, you
might prefer short range set of charts. Now, how to read the triple screen. In order to identify the entries, elder’s
original system used a combination of MACD and the force index, which are types of momentum
oscillators. In practice though, there are a variety of
other indicators that will do the same job, and work equally well or better. I personally use the hull ma on the longer
term chart, the RSI on the intermediate chart and I use price action on the short term chart,
to pinpoint the entry. Timing is everything with most strategies,
and this one is no exception. Triple screen doesn’t have a definitive
buy or sell signal. It works as a system of confirmations from
one time frame to the next. This is done in order to find a suitable time
to enter a trend in the likely direction the market is moving. This can be both a good thing and a bad thing. Because while there are no rigid criteria,
this does mean you can incorporate your own thinking into the strategy. It also means you can make it simpler by using
fewer indicators. So when to enter the market? The time to buy in the triple screen is when
a bull trend has just undergone a correction and is beginning to turn up again. Conversely, the time to sell in the triple
screen is when a bear trend has just undergone a correction and is beginning to turn down
again. Here’s how it works: to identify this, first
pull up the longest range screen – in this example we’ll use the daily chart. First step: determine the trend: I use the
100 hull moving average line to confirm the trend. In this particular chart we see the general
direction of the trend is bearish. Keep in mind that you can use any other tool
to determine the trend, elder used the MACD, I use the 100 Hull ma, you can use your favorite
trend indicator. Next we need to check the middle chart, and
in this example it is the h4 chart. We use this chart to determine the market
momentum. Using the RSI, I look at the chart to confirm
if a correction is completing. What we are trying to determine here is that
the upward buying pressure from the correction is reducing. This means the flow of profit taking and other
buy orders has hit a peak. It’s essential here as well that we check
to confirm this isn’t the start of a new bull market. If the upward correction is particularly strong,
you need to wait. So we know that the daily trend is down, and
we also identified an upward correction on the h4. I’m also interested in the RSI value, I
want it to below 50 and stay below it. Now, we add the execution chart, the 1 hour
chart. On this chart we’re looking for the optimum
time to execute the sell order. That means we look for evidence that the pullback
is completing and the market is reaching an overbought point on this time scale. I prefer to use simple price action, most
of the times i search for trendline breakouts. In this case we see this upslope trendline,
which was broken to the downside, after a correction, in the direction of the primary
trend on the daily chart. When to exit the trade? Normally there isn’t any take profit defined
for each order. I prefer to use a trailing stop loss. For this sell order, the exit stop loss is
gradually moved downwards as the market makes lower lows. This is done to lock in the profit. The loss amount and the order sizes are set
according to your desired risk limits. Let’s take another example. The first screen – we analyze this time
frame to identify the direction of the larger trend with a trend indicator. Again, I use the 100 Hull ma. 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, like in this example, you can only buy. Second screen: once we know the direction
of the trend, we are looking for a wave in the contrary direction on our intermediate
chart that will give us a beneficial entry. So you are looking at the h4 chart as your
intermediate time frame, as the daily chart showed that the larger trend is upward. You are now looking for an h4 decline which
would provide you with an advantageous opportunity to buy the market. You would do this by searching for a buy signal
from your oscillator. In this example, I use the RSI. I want to see the RSI above 50. 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 an
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. In the third screen you determine the specific
entry point. So you are aiming to go long in the market
with a h4 chart used in the second screen. Like in the previous example, i prefer to
rely on price action to enter the market, as I don’t like to use many indicators. We have a nice trend line breakout on the
h1 chart, which gave us the green light to enter long. Here are other examples of triple screen trades. The triple screen system can serve as a very
good basis for building your own trading strategy. Its big advantage is the confluence of time
frames, with following only a long-term trend. It’s not a perfect system by any means,
but it surely reduces the risk of entering at wrong times in the market. If you got any value from this and learned
something new, don’t forget to subscribe, click the bell icon to stay in touch with
new uploads and leave us a like to show your support. Until next time.

76 thoughts on “Trading Multiple Time Frames Like Professional Traders (The Triple Screen System)”

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  2. so trend indicator on the larger timeframe, momentum indicator on the middle one, with breakout entry on shorter one? have to re-watch it, but good stuff in here

  3. This is essential for trading and investing success! I teach this on my Youtube channel too because it is essential! Great video man!

  4. I love your clear understandable videos like this. This is really the first place I go when I want to learn about TA.

  5. Thanks for this content. What software do you use to chart in these videos? I'd like to use something similar for my trading game plans and journals.

  6. Nice Video. I watch several YouTube videos on how to trade in the stock market but haven't made any headstart because they are either talking some gibberish or sharing their story of how they made it and I do not want to make mistakes by taking risks in my own hands.

  7. I use a 30 High 30 low Ema Channel on Day Chart for Trend, Pullback to Bollinger Bands on 4 Hour Charts and a Break of the 30 30 Channel on a 5 minute in the direction of the Trend

  8. I allready read trading for living and welcome to my trading room by Dr.Alexander Elder, and it took me weeks to read it over and over again to understand it, and you just make it simple for 10 minutes, dude where have u been all these days…. hahahahah, but anyway nice video… keep posting a good stuff dude, I like your video, you can make it simple like counting 1..2..3, two thumbs up!

  9. The way of your teaching is very simple and good. Plz make video about fundamental analysis like cot reports for positional trading. Lot of videos available in YouTube about cot but I'm eagerly waiting for your teaching. 😀😀😀😀😀

  10. Appreciation and been thankful seems to be the best way to express my gratitude to David Haggard for all his endless efforts and skills in trading and making profits for myself and others. David Haggard has given me broad insight into how the markets work, and it is viable to consult his management for those who has little or no knowledge in trading and wants to keep the profit consistent.

  11. Excellent stuff sir,you have resolved my long term query in just a few minutes. Now I am able to develop a robust strategy for intraday trading

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  13. You always have such good content. Anyone who uses MT4 you can get an indicator that will show you multiple mini charts in other timeframes so you don't have to bounce around :).

  14. Intuitively I've been doing this. Great video with a systems approach. I learned a lot here and it reinforced some of my experiences. subscribed!

  15. Not too long ago i began trading with a new expert trader i met here via YouTube,i have to say as much as there are scammers out there,there are also genuine and praise worthy expert traders/Account managers out there,skepticism most times is the first stumbling block to success,i have overcome mine,i now earn by trading with with Mr Michael Frank.He is truly the sort of person everyone should emulate i made enough profit trading with him you should try and check him out

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  17. Indicators only tell exact true 2 days results. 3 days are lost in forex world as the indicators can’t keep up with the price at times. Test it out your self

  18. Hi
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  19. Adding to a losing trade is dangerous practice.The price can move against you for much longer than you expect choose the best broker and make it through today

  20. Last Month After Reading "The New Trading For Living" i was using Modified "Triple Screen System" and 45 Trades i lost only 3 Trades i tried in 18 Pairs and it worked very well.

  21. In binary and crypto trading, the lack of strategy is not not the problem, the problem is, you are new to this and do not possess the skills to analyze the crypto currency trading charts to make some good money. I recommend Mr Oscar Smith, an account manager and trading expert.

  22. Investing in bitcoin and forex trading will be the wisest thing to do especially with the current rise bitcoin is the future

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    During the token sale, the price of 1FNX =$0.1, it will have a three month conversion period where FNX can be converted to Asset backed token at the same IEO rate of $0.1. The conversion period will be for 3 months which means in these 3 months even if the price of FNX drops below IEO price it will still be converted at the IEO giving no risk to Investors.

  24. Hi, Can you make a video about exit strategies for mid-term/long-term long trades? Is it a good method to look at the EMAs to exit a trade?

  25. Quality content TSM/Marius, again I had to pull out my note book and take some serious notes here. Many thanks again for yet another great video. Please continue the good work you're doing.

  26. I'm following Secret Mindset's technical indicators and making decent profits on an average.. Thanks Dear…always enjoying watching your videos…

  27. I USE RSI FILTER.. I ALWAYS LOOK FOR COUNTER TREND THEN A LIGN COLOR FOR ENTRY I USE THREE CHART…

     
    trend alingning is my strategy…

    1min _ entry
    5min -candle conformation
    15min- prior trend..

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