Third Screen Strategy - Dr. Alexander Elder

well, my short never came about on GU. although daily is still showing sell., the only way i will go short now is if price falls below 15157...

also, waiting for audjpy williams 1hr to be oversold before going long again.

Regarding GBP I agree with you. It already come back from 1H %R over bought area. But I didnot enter short. I fixed my level is 1.5175. If price breaks below this level then it would better for short, I think.

i have entred long on eurgbp at 8458.

audusd, trying to enter long, but 1hr williams does not want to be oversold !

Why you are going to take Long for AUDUSD. D1 MACD is down!!!!!!!!!!!

Two Kinds of Trend Followers

If you decide on a trend following strategy, you still have a decision to make: Whether to use a discretionary system, or a mechanical one.

Discretionary Trend Followers depend on the sum total of their market knowledge to make decisions. They may rely on their own market analysis, any number of technical indicators, gut feeling, current events, the anticipation of future news events, hot tips, etc.

Discretionary trend followers may change their minds, or second guess themselves. In other words, they're subjective, so there are no guarantees that the trades they make are based on reality, and not colored by personal bias.

Mechanical Trend Followers, on the other hand, use timing strategies based on an objective and automated set of rules, to avoid the emotional biases that inevitably influence discretionary trading decisions. Mechanical trading takes the emotion out of investing.

Mechanical trend followers adhere to a set of rules to get them into, and out of, the markets. They know that some trades will not be successful. But they also know that they will always be able to take advantage of the major trends. Trading on those trends, absent of any emotional bias, is what allows this type of investor to consistently outperform their competitors over time.

It should be obvious by now that I favor a mechanical trend following system to make my trading decisions. But what specific indicators is my model based on?

The answer is simple: D1 MACD & H1 Williams %

This strategy may seem a bit boring to you. But I'm not really concerned about the fun or the emotional highs that many traders thrive on. No, I only care about one thing: Making Money.

And I've determined over many years of investing that the best way to make money — the best way to win — is by taking emotion and subjectivity out of the equation, and by using a simple, objective mechanical trend following strategy.

Learning to Ignore the Emotional Crowd

Veterans understand that the markets movements aren't based on the underlying fundamentals. They're based on the decisions of millions of individual investors and traders. And those investors' decisions are usually driven by two overriding emotions: Greed and Fear. That is why volume spikes near the tops of rallies, and again near the bottoms of corrections. Greed causes investors to jump on board, and fear causes them to jump off.

The important lesson that all successful investors eventually learn is that while there may be comfort in following the emotional crowd, there is seldom profit.

And if you want to take this lesson a step further, you can employ a mechanical timing strategy to use the emotional ups and downs of the market to make money.

Yes, discretionary trend followers sometimes have big winners. Toss a coin enough times and it will come up heads eventually. But the only certain way to be successful for the long haul in the markets is to follow a non-emotional trading strategy and to always stick to the plan.

There is no second guessing. There are no worries. And the strategy is a proven winner. We know that the markets are in trends most of the time. Rallies and corrections are going to happen. It's impossible to predict those trends with certainty, but using a mechanical trend following strategy allows us to identify them once they start, and profit along the way.

Happy Trading!

The above was mostly written by a gentleman named Doug Davenport in regards to stocks but I changed a few words to fit our system here with FOREX. We use a Mechanical Trend Following system with rules and do our best to keep emotion out of our trading style

**I hope everybody is still utilizing and profiting with the Third Screen Strategy explained here. I know I haven't been posting much as I have been very busy but things should be winding down in the coming weeks with my current project and I should be able to start spending more time on the forums again.

As always, feel free to post questions, trade analysis, trade ideas, and charts any time you wish!

WhatFx,

Looking back at a few of your posts I am thinking that maybe your MACD settings are way different then what we are using. You mind me asking what settings you are using for MACD?

Also wanted to share that I am currently short on AUD/JPY & NZD/JPY and am long on EUR/AUD and GBP/AUD.

Weekly, Daily, Open Position, & Overall Bias For Our Most Frequently Traded Pairs

AUD/JPY:
Weekly - Up
Daily - Down
Open Positions - Down
Overall - Down

CAD/JPY:
Weekly - Up
Daily - Down
Open Positions - Up
Overall - Flat

NZD/JPY:
Weekly - Up
Daily - Down
Open Positions - Down
Overall - Down

GBP/AUD:
Weekly - Up
Daily - Up
Open Positions - Up
Overall - Up

EUR/AUD:
Weekly - Up
Daily - Up
Open Positions - Up
Overall - Up

EUR/CAD:
Weekly - Down
Daily - Down
Open Positions - Up
Overall - Flat

EUR/USD:
Weekly - Flat
Daily - Down
Open Positions - Up
Overall - Flat

AUD/NZD:
Weekly - Down
Daily - Down
Open Positions - Down
Overall - Down

GBP/USD:
Weekly - Flat
Daily - Up
Open Positions - Up
Overall - Up

NZD/USD:
Weekly - Flat
Daily - Up
Open Positions - Down
Overall - Flat

AUD/USD:
Weekly - Flat
Daily - Down
Open Positions - Down
Overall - Down

Good to hear from you 100pip. Hope all is well. Thank you for posting an updated Bias report.

Cheers

my macd settings are

fast ema 12

slow ema 24

signal ema 9

histo size 3

show macd line true

show macd signal line true


my eurgbp long was opened when daily macd was blue. obviously now daily has turned red, showing a sell. but i still have my long open, not losing too much at all and my bias is that daily will be turning buy soon. but i will watch it closely and any signs of bearish continuation for too long, i will close it out.

audusd, yes daily is bearish i think my long trade contemplation was based on another strategy....incorporating williams h1 in it.

Bet the house on this one, I see buy setup, so make sure you sell, cause I never get it right, come back 100pipsaday, where are you?

OK, EUR-USD, as we know, has had 2 days up, even to weekly resistance 3, so didn't stay up yesterday, which is fine, we are looking for some pull back.

Daily chart, MACD has resumed up direction after dip almost to zero line, also I have break of Demark Trendline.

Hourly chart, definitely Williams is down in our buying range, how long will it stay there?

Zoom into 15M chart to see last time Williams was low and we see price declined until some time during the London session and before USA open.

Question: will history repeat itself or was that a news event?

Regards

Stick with the majors, anyone looking at GBP-USD ?

Daily has positive MACD, while 1 Hour has Williams % retracement

Possible trade when it cross the Daily Pivot for me

Hope you all got on the EUR-USD trade I mention yesterday, plenty of down pips, just like I said, I'm the best "cooler" around

hi every body
new position in gbpusd:

i m a new member in forex
last few days i m referring your above post to learn how to understand the trend for short as well as long term.
but get some difficulty to understand.
so if you put some example after important explanation then its good to learn easily and with enjoying it as well.
thanks a lot

You will find hundreds of examples if you READ the entire thread... I'm not going to explain this strategy any more, it is clearly explained throughout the entire thread multiple times along with charts.

I'm not going to spoon feed you Jay, sorry.

K i'll try my best.

Good analysis YEN..now waht do you think about yen....

The JPY will keep weakening in my opinion, however, we could be due for a correction. I just trade my system and wait for SL or TP targets to get hit, simple as that.

HP,


Nice thread. Love the longer term swing strategies. I've played with some with a measure of success but always have trouble with the exits. I'll definitely take your fixed TP for a spin and see how it goes.

Keep up the good work and happy trading.