Triple Screen Trading System / Elder

hagadol

Active member
I have just read "Trading For A Living" Dr Alexander Elder. Great book. He explains his trading system "Triple Screen". Also is featured in his newer book "Come Into My Trading Room".

Has anyone used this system or an ammended version ?
 

BBB

Experienced member
Yes - I was silly enough to do so when I started trading on screen. Of course, it lost. Now I know why:

The system tended to make me focus on the indicators, not price action. Big mistake number 1. I ended up trading the stochastic on the second screen DOH!

Mistake number 2 - I didn't understand the indicators properly to understand this system isn't really worth even the cheap paper it's printed on (imo). You see, when there is a confirmed trend on the 1st screen (weekly), it is unlikely you will get a valid entry signal on screen 2. This is because in the early stages of any trend, the oscillator will stay ob/os and stay there for very long periods of time. It only returns to give a valid signal when the trend is near its end. Once you've spotted the trend on screen 1, chances are you've missed the screen 2 signal. If you do catch a signal on screen2, its unlikely s1 will confirm. SO THE ONLY ENTRY SIGNAL YOU GET IS WHEN THE TREND IS OVER!

If you still want to give it a go, I'd try using a fast stochastic rather than a slow one as recomended. This may give you some valid signals - but I've never tried this.

Oh - another point - try backtesting the system - even if it's just by eyeball. You will see a few good entries in the past that will give you encouragement. This is how authors make thir living. They show what happened in hindsight. Anyone can do that.
He does make some interesting points in the first part of the book though.
 

BBB

Experienced member
50-60. Few wins, most lost. I lost 25% of my stake before I decided this was a losing proposition. My paper trades prior to this were mostly profitable however. Funny that!

I then realised I was a fool if I thought I could learn to trade profitably from a screen for the price of a book.

It took me 6 months when I was on the floor to learn to trade, so what made me think I could do this so easily.
 

neil

Legendary member
Past tense

TheWolf said:
Hey people. What timeframes do you use for the three screens? :)

I think the "people" do not trade Elders method having found it wanting. This thread does show that there is momey to be made by the likes of Elder writing about trading, more so than in trading for a living ;)
 

TheWolf

Member
I know many people who have tried using the triple screen and have worked!
 

neil

Legendary member
rhetorical question

TheWolf said:
I know many people who have tried using the triple screen and have worked!

Then there is no need to ask here if you know "many people" for whom the Elder method works, you could ask one of them since you "know "them ;)

Why not log onto Elders website ( I expect he has one to help further sales of his stuff) and see if it has a users forum :idea:
 

TheWolf

Member
neil said:
Then there is no need to ask here if you know "many people" for whom the Elder method works, you could ask one of them since you "know "them ;)

Why not log onto Elders website ( I expect he has one to help further sales of his stuff) and see if it has a users forum :idea:

Stop using quotation marks. It's annoying. :cool:
 

danfreek

Active member
I think tripple screen works well, but not in the way others seem to be using it. Whenever I used to use multiple time frames, I started with the smallest timeframe and then looked to the larger timeframes to make sure that I was not trading against a larger trend. It worked for me, but I don't use it anymore as I didn't find that I stayed in any trades long enough for the more general trend to matter.

Just my two pennies worth.
 

neil

Legendary member
Trading and Elder

danfreek said:
I think tripple screen works well, but not in the way others seem to be using it. Whenever I used to use multiple time frames, I started with the smallest timeframe and then looked to the larger timeframes to make sure that I was not trading against a larger trend. It worked for me, but I don't use it anymore as I didn't find that I stayed in any trades long enough for the more general trend to matter.

Just my two pennies worth.

Yes Dan - a lot of people would agree. I think Elder has been discussed over at Elitetrader.com if anyone wants to peruse opinions onthe Elder book further.
 

techst

Active member
I personally like Elder's concepts on trading. I dont use triple screen as such. But i do use daily and weekly charts on trades. Elder does use indicators in his trading, but surely we all know that price comes first and indicators are secondary. No-one should trade off indicators alone, i think we should all know that.
Elder's methods are just that: It's just a method. Many newbies may believe that method is the most important part of trading. But it's not. Van K Tharp studied top traders all over world, each trader had a different method. That obviously indicates that method is not the most part important of a strategy. It may sound crazy but you can trade on any beliefs about the market if you have certain key areas (money management and psychology) completely disciplined.
Elder's methods work for me, I had to read the book 5 times, write out the most inmportant parts out in hand. And then combine his work with other people work I've studied like: Steve Nison, Victor Sperandeo, Jesse Livermore, Van K Tharp etc.
I think books are just a starting point that give you something to build on. And it's not a good idea to follow a book religously and then blame the book when things go wrong. That's the easy way out, not taking the responsibility for your own mistakes.
 

paulrockhopper

Junior member
I have to agree with techst@, re Elders methods. I v.rarely post on t2w (read alot) but felt I should defend the man on here. I personally found his book very helpful, and unlike others, and I include Tharp in this, he does stick his neck on the line and gives a very basic system to begin with, ie triple screen. My own system is based on this (loosely), I rely very little on indicators but use them more as a confirmation for my position. For me price action is the most important aspect. I think Elder meant it just as that when he wrote the book. If you combine Elder with Tharp and to an extent Livermore I believe you have the basis for a good effort.
By no means an expert I feel there is a tendency to over complicate matters re trading. If you havent read it , I think its definitely worth a read if only for the chapters on money management and risk /reward however most other books seem to cover this ie 2% rule etc.
You meet a lot of people who talk of systems but dont show you one.Elders "system" isnt really a system as such but a way of finding good entries and exits. At the end of the day though how much you risk , when you go in and when you come out is entirely up to you and not when ma1 crosses ma2 with the moon in the third phase of aquarius!!
To finish I dont think you can beat just trading to improve your game but just as you couldnt give a trowel to a man who has never seen one and expect him to lay bricks , why expect that a newcomer to trading has any real chance of trading with success without a few pointers!!!
All of the above in my humble opinion , and keep up the good work people, its great to read others ideas even if you might not agree. Oh to be fair I think you have to read it at least a couple of times to really get where the guy is coming from.

Paul
 

TheWolf

Member
Thanks for the comments people. The triple screen day trading system, he suggests using 30mins frame for screen 1 and 5 mins for screen 2, i jjust think it's abit small. Has this worked for anyone?

Also, don't get why it's called triple screen! Surely you can do the work of Screen 3 on Screen 2 as you use the same timeframe :)
 

techst

Active member
Candlesticks and indicators wont print the same information on one time frame. Although saying that I use the weekly 13,26 Ema's as dailys being 65,130 (5 x 13,26). I use it for daily and weekly and haven't ventured into a daytrading approach so can't help you there.
 

TheWolf

Member
Candlesticks and indicators wont print the same information on one time frame.

Sorry for my ignorance - but can you elaborate on this please ? (linking to the triple screen) :eek:

Thanks again for your help.
 

nine

Senior member
Triple Screen basically says "if you trade in the direction of a longer term trend then you improve your probabilities" so an example might be:

1) daily timeframe trend (20ema or higher highs day) is up (screen one)
2) williams %r has retraced into buy zone on half hourly timeframe
3) last 1/2 hour bar is broken by new bar so buy (screen three)

Chick Goslins "Trading Day by Day" book has similar concepts that are expressed very clearly and probably a more worthwhile read than Elder's books (which are worth reading - interloan them at your library). http://www.trade2win.com/boards/showthread.php?t=12501&page=46&pp=10
 

techst

Active member
Hi wolf. It's up to you to find the settings that suit you mate. Elder may make suggestions but they are not set in stone. A weekly picture of a stock will have the open high low close (with candles) of the week. This means that it doesn't take into account of everyday's price action.Just the open of the week the close and where it went in between. Then, whatever indicators you use will take the weekly price data and use that. If I'm completely off track let me know. I think thats what your referring to above. If you have any further questions or if you want me to print some examples of how I use elders concepts then let me know.
 

paulrockhopper

Junior member
Wolf,

I use different timeframes , depending on what Im trading. Having said that though I only use 2 screens as I find that another one confuses the issue. For me 30/5/ 1 or 2 min is too much noise, unless your scalping which I dont. You can watch the action of the 1/2 min chart on the 5min , by its price action, if you are monitoring the market.
I found Elders book helpful because by using his rule of 5 (ie one timeframe 5 times longer than another, approx,) you are able to get a clear direction of the market for the trade you may or may not make.
So if your 30 min chart is heavily trending with an advancing macd, and a clearly rising ma , but on your shorter timeframe the market is going through a rest or small retrace, showing signs of being oversold, then if everything else in your "system" is ticking the boxes, you could go long.
As others have said , I would use it more as a base for coming up with your own system , but at least it gives you something you start with. For me I like to keep it simple, without all the indicators Elder recs. Having said that when I try them out , most just repeat what others may already show, which at the end of the day is the price action anyhow.
Again all IMHO, but thats my take anyhow
 
 
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