Third Screen Strategy - Dr. Alexander Elder | Page 79 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Substitute for screen time? 5 replies

Alexander Elder's Channel 4 replies

Elder-Rays 3 replies

Attachments: Third Screen Strategy - Dr. Alexander Elder
Exit Attachments

Third Screen Strategy - Dr. Alexander Elder

  • #1,561
  • Jun 14, 2013 7:20am Jun 14, 2013 7:20am
My question is this... Why do we not just let the EA do it's thing? Been an observation that when trades are raking in profits everyone appears to be pumped and when we go into drawdown everyone starts to talk about tweaking etc.... At moment I am in drawdown with many positions open but fortunately .01 lots per trade. Is it just me noticing this???/
  • #1,562
  • Edited 7:50am Jun 14, 2013 7:20am | Edited 7:50am
Quoting rexio
{quote} Hi MKF, This is an interesting story of yours. It certainly has some merit. How are your trading tactics with this stochastic indicator ? Do you take a trade immediateley on price entry into the overbought area or do you wait till the stoch leaves the overbought area ( getting smaller than 80 in this case) ?
Another example. Cad/J is in drawdown almost 60 pips and was signaled by WPR while Stochastics is still showing a strong short term uptrend and is not even close to O/B.
Attached Image (click to enlarge)
Click to Enlarge Name: C-J Hourly.jpg Size: 97 KB
  • #1,563
  • Jun 14, 2013 7:21am Jun 14, 2013 7:21am
BTW most pairs in drawdown are linked to au and nz linked trades
  • #1,564
  • Jun 14, 2013 7:25am Jun 14, 2013 7:25am
My only pairs in drawdown are jpy pairs. My NZD and aud pairs are doing great
  • #1,565
  • Jun 14, 2013 7:28am Jun 14, 2013 7:28am
Quoting minortrader
I am bit confused. Trade Explorer on top of the page shows Short trades taken yesterday on GBP/AUD as well as EUR/AUD. Somehow, Third Screen Strategy system on my chart shows only "Long" trades for both of these pairs during that time period. Could someone please enlighten me about the apparent mistake in my interpretation ? Thanks in advance.
I took the trades manually, however, I did wait for MACD to show down trend. I got in right at the beginning of what is hopefully to be a new down trend! I will enable the EA first thing Monday morning in order to start scaling in new positions, at that time I will also set my SL and TP targets.
Attached Image (click to enlarge)
Click to Enlarge Name: 2013-06-14_0424.png Size: 98 KB
  • #1,566
  • Jun 14, 2013 7:29am Jun 14, 2013 7:29am
Guess it all depends when we fired up the EA as well. I did this on June 12th . It will all work out I am sure
  • #1,567
  • Jun 14, 2013 7:30am Jun 14, 2013 7:30am
Quoting sheppy
My question is this... Why do we not just let the EA do it's thing? Been an observation that when trades are raking in profits everyone appears to be pumped and when we go into drawdown everyone starts to talk about tweaking etc.... At moment I am in drawdown with many positions open but fortunately .01 lots per trade. Is it just me noticing this???/
Hey bro. I am letting the EA do it's thing on one account, while I am trading manually using Stochs on another. If you would rather me NOT share my findings, and you rather trade blindly using an EA, then it's up to you. Nobody said anything about being upset about being in draw down as it's part of the business. Been trading full time for a long time, so I'm certainly am not looking to be lectured. I am merely sharing information. If you rather us just hang around this thread talking about EA B.S related questions all day, then I surely won't be around wasting my time.
  • #1,568
  • Jun 14, 2013 7:31am Jun 14, 2013 7:31am
MkFx none was aimed at you nor anyone in specific. Just an observation
  • #1,569
  • Jun 14, 2013 7:43am Jun 14, 2013 7:43am
Quoting sheppy
My question is this... Why do we not just let the EA do it's thing? Been an observation that when trades are raking in profits everyone appears to be pumped and when we go into drawdown everyone starts to talk about tweaking etc.... At moment I am in drawdown with many positions open but fortunately .01 lots per trade. Is it just me noticing this???/

Go ahead boy and let the EA do its thing if you wish so. Nobody will stop you.
  • #1,570
  • Jun 14, 2013 7:58am Jun 14, 2013 7:58am
I agree with MKFX that Stochastics would be an improvement over Williams %R. But since Stochastics can stay in OB/OS territory for a long time while price continues to climb/fall, it's better to wait until the Stochastics starts to come out of OB/OS territory (back down or back up). However, if we used the third screen of Elder's triple screen strategy, it would mitigate the need to worry about when the price begins to turn around in the direction of the trend.

The third screen is to use a trailing buy stop/sell stop on the intermediate-term trend (the H1 in this case). We would be stopped into the trade when the price starts moving in the direction of the main trend.

I don't know what EA's can be coded to do and I don't want make any suggestions for change since this isn't my thread, but does anyone else feel that the addition of the third screen would be helpful?
  • #1,571
  • Jun 14, 2013 8:16am Jun 14, 2013 8:16am
Quoting gilab
I agree with MKFX that Stochastics would be an improvement over Williams %R. But since Stochastics can stay in OB/OS territory for a long time while price continues to climb/fall, it's better to wait until the Stochastics starts to come out of OB/OS territory (back down or back up). However, if we used the third screen of Elder's triple screen strategy, it would mitigate the need to worry about when the price begins to turn around in the direction of the trend. The third screen is to use a trailing buy stop/sell stop on the intermediate-term trend...
Dr Elder writes:

For conservative traders, choose a relatively slow oscillator, such as
daily MACD-Histogram or Stochastic, for the second screen. When the
weekly trend is up, look for daily MACD-Histogram to fall below zero
and tick up, or for Stochastic to fall to its lower reference line, giving

a buy signal. Reverse these rules for shorting in bear markets. When trend following
indicators point down on the weekly charts, but daily MACDHistogram
ticks down from above its zero line, or Stochastic rallies to
its upper reference line, they give sell signals.


A conservative approach works best during early stages of major
moves, when markets gather speed slowly. As the trend accelerates,
pullbacks become more shallow. To hop aboard a fast-running trend,
you need faster oscillators.


Dr Elder speaks mostly about the use of Weekly and Daily charts, but as you all know, We use the daily and hourly which is fine as the TF is in multiple greater then 5.
  • #1,572
  • Jun 14, 2013 8:21am Jun 14, 2013 8:21am
Quoting 100PipsADay
{quote} I took the trades manually, however, I did wait for MACD to show down trend. I got in right at the beginning of what is hopefully to be a new down trend! I will enable the EA first thing Monday morning in order to start scaling in new positions, at that time I will also set my SL and TP targets. {image}
I saw the set ups last night on the new day candle, I'll usually wait for a day candle to close and confirm the MACD cross for the next day - been caught too many times where I have triggered a trade right at the top/bottom of a retrace only to watch it go back into continuation.

E/A, E/N. G/A, G/N are all showing the same pattern - could be good for next week.

Happy pip hunting
"To live with Passion, it takes Courage and Grace to survive"
  • #1,573
  • Jun 14, 2013 8:42am Jun 14, 2013 8:42am
Quoting gilab
I agree with MKFX that Stochastics would be an improvement over Williams %R. But since Stochastics can stay in OB/OS territory for a long time while price continues to climb/fall, it's better to wait until the Stochastics starts to come out of OB/OS territory (back down or back up). However, if we used the third screen of Elder's triple screen strategy, it would mitigate the need to worry about when the price begins to turn around in the direction of the trend. The third screen is to use a trailing buy stop/sell stop on the intermediate-term trend...
Hi Gilab,

How does that work specifically : "We would be stopped into the trade when the price starts moving in the direction of the main trend."? How exactly would you decide , when to be stopped into a trade ? By means of which criteria ? And would that be better than what we do now ?
  • #1,574
  • Jun 14, 2013 8:55am Jun 14, 2013 8:55am
According to Elder, the buy stop technique (and of course, the sell stop is the opposite), you place a buy order one tick above the high of the previous bar on the time-frame you're trading. This will get you in when prices are rallying. If prices decline, lower your buy order to one tick above the previous day.

This is not unique to Elder. It's a well-known way to get into a trade in the direction of the trend after a small counter-trend move. Do I think it's better? We would have to test against the current EA. But it is the 3rd screen of the triple screen. Right now, we're only using two.
  • #1,575
  • Jun 14, 2013 9:13am Jun 14, 2013 9:13am
Quoting gilab
According to Elder, the buy stop technique (and of course, the sell stop is the opposite), you place a buy order one tick above the high of the previous bar on the time-frame you're trading. This will get you in when prices are rallying. If prices decline, lower your buy order to one tick above the previous day. This is not unique to Elder. But it is the 3rd screen of the triple screen. Right now, we're only using two
That is true however, I think it would be sufficient IMO, to use a slower oscillator(stochastics as he mentions)on the hourly to pull the trigger rather then WPR. Most of Dr. Elder's teaching of this system revolves around the weekly/Daily TF, I don't think applying the third screen which you describe on the hourly would work efficiently. Especially if one is trying to trade multiple(4-8) pairs. Just my op. We should replace WPR within the EA for test purposes with stochastics with settings 14,3,3 and run it side by side to see the end result. I'm not a programmer so I have no clue how to perform this. All I know is manually trading with the use of stochastics, has yielded more efficient results and lower DD.
  • #1,576
  • Jun 14, 2013 9:20am Jun 14, 2013 9:20am
The advantage would be reducing drawdown. It would time the entries better. If we use stochastics alone, as I've said, price could go much higher/lower while in the ob/os zone. It would be a good option in the EA. If it were made to be optional and you didn't want to use it, you wouldn't have to.
  • #1,577
  • Jun 14, 2013 9:23am Jun 14, 2013 9:23am
Any advise from 100?
  • #1,578
  • Edited 9:50am Jun 14, 2013 9:31am | Edited 9:50am
Quoting gilab
The advantage would be reducing drawdown. It would time the entries better. If we use stochastics alone, as I've said, price could go much higher/lower while in the ob/os zone. It would be a good option in the EA. If it were made to be optional and you didn't want to use it, you wouldn't have to.
Well right now, with my testing, stochastics enters OB/OS levels much slower then WPR and is most often more accurate portrayal of PA movement between the two. You're right that at times stochastics stays in OB/OS territory for longer periods of time. It the same for all oscillators, even WPR. I don't find that to be a regular occurrence during corrective retraces on the hourly though. It's often the case when PA is traveling in the direction of the higher TF trend(Daily TF) that oscillators stay OB/OS for longer periods of time. Hence the saying "There is no such thing as O/S in a bear market, and no such thing as O/B in a bull market. I think it's sufficient to just have the delay hours option in the event of prolong periods of OB/OS levels just like it is now. Just switch out WPR for stochastics.

Or the other option would be an entry of a cross of the stochastic lines, from inside OB/OS levels. Not necessarily when it's coming out or having left OB/OS levels. Hope that makes sense.
  • #1,579
  • Jun 14, 2013 9:51am Jun 14, 2013 9:51am
Hi MKF,

At the moment AUDUSD has a positive MACD D1.
So, let's go hunting for Longs and see what we can achieve.

I let the EA run in its normal way ( 4 positions max) and we can compare with the entries according to your stochastic approach. I will start now with zero positions.
Can you take the stochastic entries ?


Happy Hip Punting.
  • #1,580
  • Jun 14, 2013 9:58am Jun 14, 2013 9:58am
Quoting rexio
Hi MKF, At the moment AUDUSD has a positive MACD D1. So, let's go hunting for Longs and see what we can achieve. I let the EA run in its normal way ( 4 positions max) and we can compare with the entries according to your stochastic approach. I will start now with zero positions. Can you take the stochastic entries ? Happy Hip Punting.
Sure, I'm doing that now when I'm in front of charts on one of my accounts. I run EA on another.
5 traders viewing now