My Triple Screen System (MTSS)
Hi,
The key principle of three screens is to start the analysis by exiting the market and looking at the big picture for strategic decisions. Use the long-term charts to decide whether you are bullish or bearish, then move back closer to the market to make tactical choices for entries and exits.
Triple Screen is a system for identifying and trading trends. The basic principle is to first understand the long-term trend of the market (first screen), that is, whether there is a trend. If there is a trend, you eliminate the option of trading against the trend and are left with the option of trading with the trend or sitting on the sidelines. If there is trading potential, enter the middle time frame (second screen) to see how the price is moving within that trend and look for trading opportunities. Buy the dips in an uptrend and sell the dips in a downtrend. If you find an opportunity, go to a shorter timeframe (third screen) and fine-tune your inputs based on your favorite input method. You won't get a firm buy or sell signal after completing a triple screen scan, but with proper analysis, you will know whether to go long, short, or sit on the sidelines.
It is worth noting in this discussion that long term, medium term and short term are
It's all relative. Long-term doesn't automatically mean daily, weekly, or monthly, although it might be. The way it works is that we, as traders, choose the time frame that we like best; the time frame that we are most comfortable trading. We call this time frame the middle time frame and select long and short term by moving to higher or lower time frames.
We begin the triple screen by identifying our trader type. Do we prefer long-term position trading? Swing trading? Day trading or scalping? Depending on our style, we choose our favorite time frame to trade. For example, as a position trader, we might choose to trade the daily chart; as a swing trader, the 4-hour or 1-hour chart; and as a day trader, we might prefer the 15-minute chart. Once a decision is made, this preferred chart will be determined as our middle time frame and become our second screen. Following the advice of Dr. Alexander the Elder, we then spread the timeframes as close to five times apart as the trading platform allows and select the higher and lower timeframes. For example, if we are a position trader using the daily chart, then 1 day X 5 = 5 days. This will define the weekly chart, which will become our first screen. Again, we select the third screen by dividing the middle time range by 5: 1 day / 5 = 4.8 hours, or a 4-hour chart. Some trading platforms are able to optimize these timings and will allow for more precise time frames if you choose to do so.
Happy peeling, guys! ! ! !
Sairam
The key principle of three screens is to start the analysis by exiting the market and looking at the big picture for strategic decisions. Use the long-term charts to decide whether you are bullish or bearish, then move back closer to the market to make tactical choices for entries and exits.
Triple Screen is a system for identifying and trading trends. The basic principle is to first understand the long-term trend of the market (first screen), that is, whether there is a trend. If there is a trend, you eliminate the option of trading against the trend and are left with the option of trading with the trend or sitting on the sidelines. If there is trading potential, enter the middle time frame (second screen) to see how the price is moving within that trend and look for trading opportunities. Buy the dips in an uptrend and sell the dips in a downtrend. If you find an opportunity, go to a shorter timeframe (third screen) and fine-tune your inputs based on your favorite input method. You won't get a firm buy or sell signal after completing a triple screen scan, but with proper analysis, you will know whether to go long, short, or sit on the sidelines.
It is worth noting in this discussion that long term, medium term and short term are
It's all relative. Long-term doesn't automatically mean daily, weekly, or monthly, although it might be. The way it works is that we, as traders, choose the time frame that we like best; the time frame that we are most comfortable trading. We call this time frame the middle time frame and select long and short term by moving to higher or lower time frames.
We begin the triple screen by identifying our trader type. Do we prefer long-term position trading? Swing trading? Day trading or scalping? Depending on our style, we choose our favorite time frame to trade. For example, as a position trader, we might choose to trade the daily chart; as a swing trader, the 4-hour or 1-hour chart; and as a day trader, we might prefer the 15-minute chart. Once a decision is made, this preferred chart will be determined as our middle time frame and become our second screen. Following the advice of Dr. Alexander the Elder, we then spread the timeframes as close to five times apart as the trading platform allows and select the higher and lower timeframes. For example, if we are a position trader using the daily chart, then 1 day X 5 = 5 days. This will define the weekly chart, which will become our first screen. Again, we select the third screen by dividing the middle time range by 5: 1 day / 5 = 4.8 hours, or a 4-hour chart. Some trading platforms are able to optimize these timings and will allow for more precise time frames if you choose to do so.
Happy peeling, guys! ! ! !
Sairam
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