Elder Triple Screen

One timeframe can't show the full picture - you can't see the forest for the trees. Two timeframes improve things but still miss precision. Three timeframes (at ~5:1 ratio) provide: major trend context, intermediate entry timing, and precise execution. This balances completeness with actionability.

No, the key is the ratio (~5:1), not the specific timeframes. For day trading use Daily/4H/1H. For position trading use Monthly/Weekly/Daily. Elder originally used Weekly/Daily/Hourly, but the concept adapts to any trading style.

This happens in strong uptrends - there may be no pullback to buy. Don't chase! Wait for either: 1) Stochastic to eventually get oversold, 2) First screen to change, or 3) Move to a different stock with a valid setup. Patience is essential.

Yes. Elder also suggested the 13-week EMA slope - price above rising EMA is bullish, below falling EMA is bearish. Some traders use ADX or simple MA slope. The key is a trend-following indicator that shows major direction.

Triple Screen is designed for swing trading - typically holding days to weeks. You enter on a wave (pullback) and exit when the wave completes (opposite oscillator extreme) or when the tide changes. Not for scalping or very long-term investing.

If price gaps through your buy stop, you'll be filled at the gap open price. This increases risk (further from your stop). Options: 1) Accept the gap fill, 2) Use a limit order at expected entry zone, 3) Wait for price to pull back near your stop level before entering.

Stochastic is simpler and shows clear overbought/oversold levels - good for beginners. Force Index incorporates volume, providing volume confirmation. Many experts use both - Stochastic for oversold signal, Force Index for confirmation. Either works alone.

Check the index (XJO) first screen for overall market bias. Only take individual stock trades aligned with the index. Limit positions per sector (e.g., max 2 in Materials). Total portfolio risk should not exceed 6-10% at any time.

Move to breakeven when the trade has moved 1R (one risk unit) in your favor. For example, if you risked $3, move stop to breakeven when you're up $3. This protects capital while allowing winners to run.

Exit the trade, regardless of profit or loss. When the tide turns, the wave you were riding is now working against you. Don't fight the new tide - respect the first screen reversal and preserve capital.

In high volatility: widen Stochastic zones to 20/80 (less whipsaws), use longer oscillator periods, and widen stops. In low volatility: tighten zones to 35/65, use shorter oscillator periods, and tighten stops. Monitor ATR for regime changes.

Yes, the rules are objective and programmable. Screen 1: Calculate MACD histogram slope. Screen 2: Monitor Stochastic levels. Screen 3: Generate trailing stop orders. Add filters for setup quality scoring and position sizing automation.

Screen 1 determines direction (calls for bullish, puts for bearish). Screen 2 times the entry (enter at oscillator extreme). Screen 3 guides strike selection (ATM or slightly OTM) and DTE (enough time for wave to complete, typically 30-45 days).

Analysis shows: Strong first screen slope improves win rate from 50% to 69%. Deeper second screen oversold (<20 vs 25-30) improves win rate from 50% to 73%. Triggers within 2 days work better than delayed triggers (62% vs 40% WR).

Track win rate and profit factor by: 1) First screen strength, 2) Second screen extremity, 3) Market regime (trending vs ranging). If results deteriorate in normally profitable categories, the edge may be decaying. Consider parameter adjustment or reducing position sizes.