Attachments: Third Screen Strategy - Dr. Alexander Elder

Third Screen Strategy - Dr. Alexander Elder

#141
Edited 1:58pm Mar 16, 2013 1:47pm | Edited 1:58pm

100PipsADay
| Commercial User | Joined May 2012 | 3,285 Posts

Quoting MKFXTrader

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Great results P. I hope you got long on G/U from below. I had that as a good signal with the hammer(I call it a kangaroo tail) off a MML support level Looks like MACD is now crossing. AUD/CHF was same setup except going short after thursday close and break of that low on Friday Asian session. CAD/CHF, EUR/GBP was just a few of the other setups this past week.

I haven't thought of analyzing from the weekly chart as Dr Elder suggested. Is this something you do or you just use the weekly to recognize basic levels of S&R? If I read his...

Ignored

Third Screen Strategy is strictly D1 MACD and H1 Williams %.

I incorporate Price Action @ Support / Resistance on the weekly charts in order to find potential "trend reversals."

As for the MACD it doesn't really matter quite as much, MA or Histogram, either way is fine as D1 allows a little more flexibility then the smaller time frames.

I just posted the following in another thread explaining in detail HOW and WHY I traded the GBP/AUD in 2013.

1) EUR/AUD and GBP/AUD use a 260 Pip SL and a 320 Pip TP. JPY Cross Pairs use 160 Pip SL and a 280 Pip TP

2) I follow charts throughout the day but only place trades every couple of days on average. Mainly just keep an eye on H1 time frame. **Also, this system has been programmed into an EA so not much human intervention is needed now anyways.

3) I use a Trend Strategy which uses a part of the "Third Screen Strategy" of Dr. Alexander Elder. First, I find in a D1 chart the global trend using the MACD indicator. Once the overall trend is clear, I use the H1 time frame to act in the same trend using the Williams Percentage Indicator.

This system basically uses D1 MACD & H1 Williams % However, I do keep an eye on Price Action at weekly support / resistance levels in order to find potential trend reversals. I also like to keep an eye on the 20 EMA and 50 EMA but they are not really necessary for my strategy.

I have posted a few charts showing HOW and WHY positions were opened up since January 2013.

http://www.forexfactory.com/attachme...0&d=1363456846
http://www.forexfactory.com/attachme...1&d=1363456846
http://www.forexfactory.com/attachme...2&d=1363456846
http://www.forexfactory.com/attachme...3&d=1363456846
http://www.forexfactory.com/attachme...4&d=1363456846

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#142
Mar 16, 2013 2:16pm Mar 16, 2013 2:16pm

MKFXTrader
| Joined Jan 2013 | Status: Live the dream.... | 1,153 Posts

Quoting 100PipsADay

Disliked

Third Screen Strategy is strictly D1 MACD and H1 Williams %.

I incorporate Price Action @ Support / Resistance on the weekly charts in order to find potential "trend reversals."

As for the MACD it doesn't really matter quite as much, MA or Histogram, either way is fine as D1 allows a little more flexibility then the smaller time frames.

I just posted the following in another thread explaining in detail HOW and WHY I traded the GBP/AUD in 2013.

1) EUR/AUD and GBP/AUD use a 260 Pip SL and a 320 Pip TP. JPY Cross Pairs use 160 Pip SL...

Ignored

This is what I gathered. Just wanted to confirm. Do you have any thoughts on AUD/CHF, GBP/CHF, EUR/GBP and G/U? These are the pairs I have on my trading plan to add positions to. They've all bounced off major S&R using weekly/daily MML provided with Kangaroo tail signals (hammer, shooting star) on daily to confirm. Let me know what you think.

What pairs are you only concentrating on at the moment?

#143
Mar 16, 2013 2:45pm Mar 16, 2013 2:45pm

100PipsADay
| Commercial User | Joined May 2012 | 3,285 Posts

Quoting MKFXTrader

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This is what I gathered. Just wanted to confirm. Do you have any thoughts on AUD/CHF, GBP/CHF, EUR/GBP and G/U? These are the pairs I have on my trading plan to add positions to. They've all bounced off major S&R using weekly/daily MML provided with Kangaroo tail signals (hammer, shooting star) on daily to confirm. Let me know what you think.

What pairs are you only concentrating on at the moment?

Ignored

No problem.

AUD/CHF, GBP/CHF, and EUR/GBP are not pairs that I really pay attention to so I really can't say, however, I do trade EUR/AUD (inverse of AUD/CHF) and I am still bearish on this pair until PA tells me otherwise. So if you have a solid BUY signal for AUD/CHF I think you have a good trade for the coming week(s)

As for EUR/GBP I just took a look at the Weekly and Daily charts and it looks as though price is being held at resistance from a weekly perspective but looks to be consolidating from a Daily perspective after a quick move up. It could be catching it's breath before a major break out to the upside, or it could fall back into its Monthly down trend. Probably best to stay out for the time being in my opinion...

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#144
Mar 16, 2013 2:55pm Mar 16, 2013 2:55pm

100PipsADay
| Commercial User | Joined May 2012 | 3,285 Posts

Forgot about GBP/USD.

Hmmm....this one is tough at the moment.

Previous monthly candle is extremely bearish and we are definitely in a down trend on the Weekly as we have broken out of a 4-Year symmetrical triangle to the downside! On the Daily price showed bullish activity towards the end of last week but it could be making its way back to the 50 EMA @ about 1.535 before resuming its down trend.

Also, D1 MACD just turned BULLISH so it may be profitable to go long once H1 is over sold, in fact, if you got long on Friday it should be a good trade for at least a couple hundred pips.

So it looks like a solid buy signal on the Daily time frame but is technically a counter trend trade so is a little more risky. Still could be good though for 200-300 pips.

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#145
Mar 16, 2013 4:00pm Mar 16, 2013 4:00pm

MKFXTrader
| Joined Jan 2013 | Status: Live the dream.... | 1,153 Posts

Quoting 100PipsADay

Disliked

Forgot about GBP/USD.

Hmmm....this one is tough at the moment.

Previous monthly candle is extremely bearish and we are definitely in a down trend on the Weekly as we have broken out of a 4-Year symmetrical triangle to the downside! On the Daily price showed bullish activity towards the end of last week but it could be making its way back to the 50 EMA @ about 1.535 before resuming its down trend.

Also, D1 MACD just turned BULLISH so it may be profitable to go long once H1 is over sold, in fact, if you got long on Friday it should be a good trade...

Ignored

Thanks 100Pips.

#146
Mar 16, 2013 6:51pm Mar 16, 2013 6:51pm

100PipsADay
| Commercial User | Joined May 2012 | 3,285 Posts

Quoting MKFXTrader

Disliked

This is what I gathered. Just wanted to confirm. Do you have any thoughts on AUD/CHF, GBP/CHF, EUR/GBP and G/U? These are the pairs I have on my trading plan to add positions to. They've all bounced off major S&R using weekly/daily MML provided with Kangaroo tail signals (hammer, shooting star) on daily to confirm. Let me know what you think.

What pairs are you only concentrating on at the moment?

Ignored

I didn't see your last question earlier.

I am focusing on EUR/AUD, GBP/AUD, AUD/JPY, CAD/JPY but will also trade EUR/JPY, NZD/JPY, GBP/JPY, and sometimes GBP/USD

#147
Mar 16, 2013 6:56pm Mar 16, 2013 6:56pm

100PipsADay
| Commercial User | Joined May 2012 | 3,285 Posts

#148
Mar 16, 2013 8:31pm Mar 16, 2013 8:31pm

Coondawg71
| Joined Sep 2011 | Status: Trader | 140 Posts

Great work 100 !!! Congrats!

sjc

#149
Mar 17, 2013 2:18am Mar 17, 2013 2:18am

100PipsADay
| Commercial User | Joined May 2012 | 3,285 Posts

Quoting Coondawg71

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Great work 100 !!! Congrats!

sjc

Ignored

Thanks CoonDawg! Hoping for another fun and profitable year!

#150
Edited 7:29pm Mar 17, 2013 6:24am | Edited 7:29pm

Fishcoo
| Joined Jul 2012 | Status: Trader | 128 Posts

Thank your for your great work. January 25 D1 MACD bullish on EURAUD ,why not open a long position when H1 Williams% is showing "over sold"? Because EMA20 and EMA50 show the trend is bearlish , am i right or wrong?I am puzzled ,can you help me ?Thanks

Best regards.
Fishcoo

http://www.forexfactory.com/attachme...2&d=1363456846

#151
Mar 18, 2013 3:48am Mar 18, 2013 3:48am

100PipsADay
| Commercial User | Joined May 2012 | 3,285 Posts

Quoting Fishcoo

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Thank your for your great work. January 25 D1 MACD bullish on EURAUD ,why not open a long position when H1 Williams% is showing "over sold"? Because EMA20 and EMA50 show the trend is bearlish , am i right or wrong?I am puzzled ,can you help me ?Thanks

Best regards.
Fishcoo

http://www.forexfactory.com/attachme...2&d=1363456846

Ignored

Hi Fishcoo,

Sorry I didn't get back to you sooner. As for January 25 GBP/AUD we would not enter long because short positions are already opened and floating, We try not to close positions until stop loss or profit target is met. Therefore, as long as there are open short positions we would not look to go long.

The 20 EMA and 50 EMA are also good guides, if price is below both EMA's then that pair is more than likely in a down trend. If price is above, then it is safer to look for long positions assuming everything else lines up for a buy/sell signal. I suggest everybody put a 20 EMA and a 50 EMA on your daily chart for multiple currency pairs and observe how price respects those two EMA's.

Another reason which actually doesn't pertain to the Third Screen Strategy is that GBP/AUD is in a monthly and weekly down trend so the best way to trade off of the Daily is in the same direction as the weekly and monthly.

#152
Mar 18, 2013 3:51am Mar 18, 2013 3:51am

100PipsADay
| Commercial User | Joined May 2012 | 3,285 Posts

Weekend "Gaps"

I'm sure most here are aware of "Gaps" and why they occur, but have you taken a look at the statistics and probabilities of the "gaps" being filled the same trading day?

Gaps in the forex market usually occur during the weekend between previous friday's close price and current monday's open price. The gap itself appears due to the fact that the forex market trades 24 hours, 7 days a week whilst most forex brokers are open for currency trading from Monday 0:00 am ET – Friday 4:00 pm ET. Thus on mondays, the broker needs to update its currency prices which may be different from friday's closing prices.

Type Of Forex Gaps

1) A bullish gap occurs when last friday's close price is lower than current monday's open price.
2) A bearish gap occurs when last friday's close price is higher than current monday's open price.

Case Study on Forex Gaps

The study on gaps in the forex market was conducted between 2002 and 2010, and examined over 25 currency pairs. The following table shows the best gap performers amid the 25 currency pairs.

Currency Pair% Forex Gaps Filled The Same Day
GBP/CAD - 88.60%
EUR/CAD - 82.70%
EUR/AUD - 81.60%
GBP/CHF - 78.75%
USD/CHF - 77.71%
AUD/JPY - 74.35%
GBP/USD - 72.18%
EUR/USD - 66.15%

Rules To Trade Bullish Gaps

*Upward gap should be at least 20 pips wide.
*Identify bearish reversal patterns above the bullish gap so that you can enter a short position in the market. For example, you could use bearish candlestick reversals patterns, reversal chart patterns and trend lines to pinpoint short entries.
*Enter short at market after the bearish reversal pattern is complete.
*Place your stop loss 1 pip behind the high of the bearish reversal pattern.
*Friday's close price should be your target price.

Rules To Trade Bearish Gaps

*Downward gap should be at least 20 pips wide.
*Identify bullish reversal patterns below the bearish gap so that you can enter a long position in the market. For example, you could use bullish candlestick reversals patterns, reversal chart patterns and trend lines to pinpoint long entries.
*Enter long at market after the bullish reversal pattern is complete.
*Place your stop loss 1 pip behind the low of the bullish reversal pattern.
*Friday's close price should be your target price.

Hope this information helps!

#153
Mar 18, 2013 6:20am Mar 18, 2013 6:20am

Fishcoo
| Joined Jul 2012 | Status: Trader | 128 Posts

Quoting 100PipsADay

Disliked

Hi Fishcoo,

Sorry I didn't get back to you sooner. As for January 25 GBP/AUD we would not enter long because short positions are already opened and floating, We try not to close positions until stop loss or profit target is met. Therefore, as long as there are open short positions we would not look to go long.

The 20 EMA and 50 EMA are also good guides, if price is below both EMA's then that pair is more than likely in a down trend. If price is above, then it is safer to look for long positions assuming everything else lines up for a...

Ignored

Thanks for your help,100PipsADay.
Now i see the reason for the trade.I think your system is simple but very usefull for me.I like it and will retest it.I enter a long position on GBPUSD today,but weekly and Monthly chart show bearlish trend and let's see where it will go. Where will you set SL for GBPUSD?

BR
Fishcoo

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#154
Mar 18, 2013 6:54am Mar 18, 2013 6:54am

howard
| Joined Sep 2006 | Status: howard | 1,693 Posts

Hello 100

Do you open your positions as soon as 1 hour Williams goes into overbought/oversold territory OR do you wait until it moves out of that area?

having a look at the indicator shows that it may stay in OB/OS for lengthy periods of time thus positions going under water for some time, whereas if you let it come back out and touch for instance the -40 or -50 level on 1hour close you will have much better positions with less drawdows, which option do you employ?

Also to add to your positions do you wait for the indi to go to the other side and come back to above -20 (for shorts for example) again to open another position or do you just add while it is staying in the same area and price moving against you?

Thank you for this very useful thread

Regards

#155
Mar 18, 2013 7:16am Mar 18, 2013 7:16am

MKFXTrader
| Joined Jan 2013 | Status: Live the dream.... | 1,153 Posts

Quoting howard

Disliked

Hello 100

Do you open your positions as soon as 1 hour Williams goes into overbought/oversold territory OR do you wait until it moves out of that area?

having a look at the indicator shows that it may stay in OB/OS for lengthy periods of time thus positions going under water for some time, whereas if you let it come back out and touch for instance the -40 or -50 level on 1hour close you will have much better positions with less drawdows, which option do you employ?

Also to add to your positions do you wait for the indi to go to the other side...

Ignored

IMO When oscillators stay in OB/OS levels for longer period of time on lower TF is because PA is following the trend on higher TF's. If you are trading with the trend then OB/OS levels will not be so long drawn out.

Remember that there is no such thing as having oversold conditions in a bearish market, and vice versa in a bullish market. Just my op.

#156
Mar 18, 2013 7:27am Mar 18, 2013 7:27am

100PipsADay
| Commercial User | Joined May 2012 | 3,285 Posts

Quoting Fishcoo

Disliked

Thanks for your help,100PipsADay.
Now i see the reason for the trade.I think your system is simple but very usefull for me.I like it and will retest it.I enter a long position on GBPUSD today,but weekly and Monthly chart show bearlish trend and let's see where it will go. Where will you set SL for GBPUSD?

BR
Fishcoo

Ignored

I normally use a set 160 SL and 280 TP. However, for some pairs I use a SL of 260 and a TP of 320. Its up to you though.

#157
Mar 18, 2013 7:54am Mar 18, 2013 7:54am

100PipsADay
| Commercial User | Joined May 2012 | 3,285 Posts

Quoting howard

Disliked

Hello 100

Do you open your positions as soon as 1 hour Williams goes into overbought/oversold territory OR do you wait until it moves out of that area?

having a look at the indicator shows that it may stay in OB/OS for lengthy periods of time thus positions going under water for some time, whereas if you let it come back out and touch for instance the -40 or -50 level on 1hour close you will have much better positions with less drawdows, which option do you employ?

Also to add to your positions do you wait for the indi to go to the other...

Ignored

Hi Howard,

This would all depend on the traders' personal preference. I like to open a few positions (2-4) and then when I am in profit by about 100-150 pips or so for each trade, I may look to add another 2-4 positions. Its up to you.

#158
Mar 18, 2013 6:20pm Mar 18, 2013 6:20pm

whatfx
| Joined Jun 2010 | Status: The Villain | 2,565 Posts

i have closed and taken profit on my ej long.

presently opened long on gj.

it looks as though ej long has reached a peak ? what do you think ? may reverse downwards....

i see your gap info. hellpful stuff. i already made +40 pips trading the gap on eu this morning on long. looking to enter long again at a suitable level. presently my signals are showing a downmove, so just waiting for that to end.

#159
Mar 19, 2013 12:37am Mar 19, 2013 12:37am

100PipsADay
| Commercial User | Joined May 2012 | 3,285 Posts

Quoting whatfx

Disliked

i have closed and taken profit on my ej long.

presently opened long on gj.

it looks as though ej long has reached a peak ? what do you think ? may reverse downwards....

i see your gap info. hellpful stuff. i already made +40 pips trading the gap on eu this morning on long. looking to enter long again at a suitable level. presently my signals are showing a downmove, so just waiting for that to end.

Ignored

Hi WhatFx,

I am still long term bullish on ALL JPY cross pairs including EUR/JPY. I am still holding quite a few long positions for ALL JPY cross pairs at the moment. Right now my main focus is trading JPY cross pairs especially AUD/JPY, CAD/JPY, and NZD/JPY, but also holding a few CHF/JPY and GBP/JPY longs as well.

By the way, nice work on your E/J longs

I'm glad you liked the "Gap Trading" information and were able to make a profit using the information provided to you.

#160
Mar 22, 2013 5:39am Mar 22, 2013 5:39am

malmal1985
| Joined Jan 2013 | Status: Trader | 48 Posts

i like both u and this topics.In recent time, i have been learning how to use it. but i have some difficulities: if it have a strong wave, the cycle of up and down lasts from 6 months to 1 year, makes more point- breaking in MACD, the result 0f which is more wrong signal.
I am sorry but english is not my mother tongue. thanks you

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