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Third Screen Strategy - Dr. Alexander Elder

  • #1,801
  • Jun 19, 2013 1:11am Jun 19, 2013 1:11am
Quoting 100PipsADay
{quote} You're very welcome! Yes, this is a very simple and powerful strategy. Just follow the rules and I promise you that you will be profitable! **Just wanted to point out what is currently going on with EUR/AUD and GBP/AUD, although we got stopped out on a few trades I added a few more positions and we are now moving nicely into profit. I know the day is still young but looking at the EUR/AUD and GBP/AUD daily candles I can't help but think about all of the green pips coming our way in the very near future.
You were deep in the red with a 6% drawdown.

Now you've recovered the 6%, and the fun starts.
  • #1,802
  • Jun 19, 2013 1:19am Jun 19, 2013 1:19am
Quoting Tok
{quote} You were deep in the red with a 6% drawdown. Now you've recovered the 6%, and the fun starts.
Yep, like I said though I LOVE when trades move against me as that gives me more opportunity for better entry prices on new positions.

Let's see what today will bring!
  • #1,803
  • Jun 19, 2013 1:55am Jun 19, 2013 1:55am
Quoting 100PipsADay
{quote} Yep, like I said though I LOVE when trades move against me as that gives me more opportunity for better entry prices on new positions. Let's see what today will bring!
100pips Thanks for advice about s/l 160 is too short , Will put in longer , Now mine is in profit , Look at my % , Seems better put s/l and leave out t/p , Close it myself when MACD change colour . My favourite is GBP/JPY , Thanks Malcolm ,
  • #1,804
  • Jun 19, 2013 2:07am Jun 19, 2013 2:07am
Quoting terminator12
{quote} 100pips Thanks for advice about s/l 160 is too short , Will put in longer , Now mine is in profit , Look at my % , Seems better put s/l and leave out t/p , Close it myself when MACD change colour . My favourite is GBP/JPY , Thanks Malcolm ,
Congratulations Terminator!

I'm glad to see you are making money with this system. It looks like your equity curve didn't really go anywhere until you came across this system, great work!
  • #1,805
  • Jun 19, 2013 2:10am Jun 19, 2013 2:10am
Quoting 100PipsADay
{quote} If you have a hard time figuring it out when the reversal occurs just wait for SL targets to be met and then MOST OF THE TIME this IS the signal that trend has reversed in many cases. This is why I don't like to keep jumping in and out of trades. Once SL target is hit it more than often means a reversal in trend has occured. {image}
I see, thanks for the explanation.

I had been thinking of closing all open positions on any pair when the D1 MACD histogram changes colour but you have made a good point for leaving them open to either hit T/P or S/L.
  • #1,806
  • Jun 19, 2013 2:14am Jun 19, 2013 2:14am
Quoting normtold
{quote} I see, thanks for the explanation. I had been thinking of closing all open positions on any pair when the D1 MACD histogram changes colour but you have made a good point for leaving them open to either hit T/P or S/L.
Closing positions early when Histogram changes color is NOT recommended. Take a look at GBP/AUD for example.

You would have experienced quite a few losses before getting back into the uptrend which lasted about 3 months!

*Wait for SL or TP target to get hit then reassess that currency pair AFTER
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  • #1,807
  • Jun 19, 2013 2:14am Jun 19, 2013 2:14am
Quoting 100PipsADay
{quote} Congratulations Terminator! I'm glad to see you are making money with this system. It looks like your equity curve didn't really go anywhere until you came across this system, great work!
In that case, his Trade Explorer is aptly named

The third degree is a euphemism for the "inflicting of pain, physical or mental, to extract confessions or statements"

It takes a lot for me to IGNORE you, but you can try.
  • #1,808
  • Jun 19, 2013 2:17am Jun 19, 2013 2:17am
Quoting Erebus
{quote} In that case, his Trade Explorer is aptly named The third degree is a euphemism for the "inflicting of pain, physical or mental, to extract confessions or statements"
LOL
  • #1,809
  • Jun 19, 2013 2:54am Jun 19, 2013 2:54am
Quoting 100PipsADay
{quote} Closing positions early when Histogram changes color is NOT recommended. Take a look at GBP/AUD for example. You would have experienced quite a few losses before getting back into the uptrend which lasted about 3 months! *Wait for SL or TP target to get hit then reassess that currency pair AFTER {image}
Yes I can see where the MACD histogram on some pairs has bimbled about from blue to red so letting it hit T/P or S/L would have been the best option.


But I just wanted you to see Gbp/Aud with my broker, no change of histogram during the uptrend. It does vary from broker to broker.

EA disable by the way.
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  • #1,810
  • Jun 19, 2013 2:57am Jun 19, 2013 2:57am
Quoting normtold
{quote} Yes I can see where the MACD histogram on some pairs has bimbled about from blue to red so letting it hit T/P or S/L would have been the best option. But I just wanted you to see Gbp/Aud with my broker, no change of histogram during the uptrend. It does vary from broker to broker. EA disable by the way. {image}
You are 100% correct Normtold! I didn't think about different brokers having different server time which will affect MACD signals from time to time.
  • #1,811
  • Jun 19, 2013 3:16am Jun 19, 2013 3:16am
100pips,

Where do you think the FOMC will leave us? Take our trades in our direction, or against us?
  • #1,812
  • Jun 19, 2013 3:21am Jun 19, 2013 3:21am
Quoting 100PipsADay
{quote} Yep! NZD/JPY is giving me BUY signals now with the Third Screen EA. If I was manual trading I would technically wait for the Blue bar which will be there tomorrow, unless of course we get some major drop with JPY pairs before daily close. AUD/JPY D1 MACD will be UP tomorrow as well. {image} {image}

The Daily MACD is in a downtrend. At the same time the EA gives A BUY signal ??

Looks to me like a BUG in the EA.

Also, the blue bar in the macd will take at least 2 to 3 days to develop.It will by no means be there tomorrow.
When, inspite of all this, you decide to buy, then this is a decision, made because of price action, not because of the thirdscreen system.
  • #1,813
  • Jun 19, 2013 3:29am Jun 19, 2013 3:29am
Quoting Tok
100pips, Where do you think the FOMC will leave us? Take our trades in our direction, or against us?
I personally don't think that the Fed is going to reduce the size of its money-printing program (QE) anytime soon. The Fed's 2% inflation target (CPI) is Ben Bernanke's BIGGEST decision maker and right now it is not looking good for him! Below is an article that talks a little bit about what is going on and one possible scenario. However, the upcoming FOMC meeting could send our trades in either direction depending on what is said, I don't have a crystal ball so it's really hard to tell what is going to happen.

They Think You're Naive...
Evaldo Albuquerque (June 17, 2013)

When it comes to the financial markets, Bernanke is, without a question, the most powerful man in the world. Every time he opens his mouth, the markets move.

On May 22, he suggested that the Fed may soon reduce the size of its money-printing program, known as QE. Since then, the market has experienced a small meltdown.

More than $2.5 trillion has already been erased from the value of global equities.

If the Fed is not bluffing about the end of QE, this could just be the beginning of a much bigger downturn in global markets.

But this week, there’s one event that could put an end to this ongoing market turmoil…

The Fed will show its cards this coming Wednesday…but I’m calling the Fed’s bluff now. The Fed won’t end QE anytime soon.


Here’s why…
Three Reasons Why the Fed Won’t End QE Now
Some analysts think the Fed announcing the end of QE would be a good thing. They think it would indicate the Fed is confident the economy is strong enough to operate without stimulus.

The only problem is the Fed is thinking about ending QE for a reason that has nothing to do with healthy economic growth.

Legendary bond investor Bill Gross recently pointed out that the Fed may end QE simply because there are fewer bonds available for them to purchase. Since the U.S. deficit has been lower than expected, the government has been issuing fewer bonds.

So if the Fed decides to end QE, it won’t be because of a strong economy. That’s why it could lead to a more significant correction across global markets.

But there are three reasons to believe that the Fed is bluffing.
1. Inflation Has Been Declining

http://sovereignsociety.com/files/2013/06/chart-25.gif

The market may be overreacting to the possibility of the Fed ending its money-printing program. Although some members of the Fed believe QE should end, Bernanke is the one calling the shots. I don’t think the economy is strong enough to make him change his mind, especially considering the recent decline in inflation.
Inflation, as measured by the CPI, is not moving in the direction the Fed wants. The Fed wants inflation a little above 2%. This decline indicates that the risk of deflation, Bernanke’s worst nightmare, is increasing.
Given this declining inflation rate, I think it’s unlikely the Fed will stop printing money now. And if they do, it won’t take long for them to reinitiate another round of QE.
2. The Velocity of Money Remains in Free Fall

http://sovereignsociety.com/files/2013/06/chart-31.gif

Another indicator that can measure the risks of inflation is the velocity of money, which basically indicates how fast money is flowing through the economy. The free fall in the chart above indicates that the risk of deflation is greater than the risk of inflation.

As you know, Bernanke is terrified that our economy will end up like the Japanese economy, trapped in a deflation for decades. This free fall in the velocity of money indicates we’re heading toward the Japanese scenario. For that reason, I think it’s unlikely he will end QE now.
3. Higher Yields Will Hurt the Economy

http://sovereign-investor.com/files/...6/chart-11.gif

Since the Fed announced a possible end of its bond purchase program, yields on 10-year Treasury bonds have jumped higher. Since the Fed’s purchases were artificially keeping yields at low levels, it makes sense that yields are rising.
The problem is that mortgage rates are tied to the yield on 10-year Treasury bonds. Higher yields in bonds result in higher mortgage rates, which reduce housing affordability.

As you can see in the chart from Bankrate.com, the national average of the 30-year fixed mortgage rate has already risen from 3.52% to 4.1% in the last five weeks.

Can the Fed really afford to hurt the housing market— one of the few bright spots of the U.S. economy?

If the jobs market was really healthy and the economy was booming, higher mortgage rates wouldn’t really be a problem. But the economy is clearly not booming.
Mortgage applications have already dropped in recent weeks. And mortgage rates could go higher if the Fed really decides to end QE now. This would lead to a slowdown in the housing market, which has been the main force behind the economic recovery so far.

Keep an eye of the Fed’s announcement next Wednesday. I think the Fed will indicate that it will not end QE anytime soon. This has the potential to put an end to the recent market turmoil.

Regards,
http://sovereignsociety.com/wp-conte...s/evaldo_0.gif
Evaldo Albuquerque
Editor, Pure Income
  • #1,814
  • Jun 19, 2013 3:36am Jun 19, 2013 3:36am
Quoting rexio
{quote} The Daily MACD is in a downtrend. At the same time the EA gives A BUY signal ?? Looks to me like a BUG in the EA. Also, the blue bar in the macd will take at least 2 to 3 days to develop.It will by no means be there tomorrow. When, inspite of all this, you decide to buy, then this is a decision, made because of price action, not because of the thirdscreen system.
Rexio,

You're telling me that there WON'T be a blue bar on tomorrow's D1 MACD for NZD/JPY? I say you are wrong and have no idea about what you're talking about yet you state this as a FACT... Please explain in detail how it will take at least 2 to 3 days to develop? I want to know every detail in your explanation explaining how and why this is a fact.

If there is a blue bar tomorrow then you owe me $100 USD, deal?

Sometimes I can't help but notice that you are too "smart" for your own good... I'm sure that this problem has hindered you from becoming a profitable trader more than once, am I wrong?
  • #1,815
  • Jun 19, 2013 3:37am Jun 19, 2013 3:37am
Quoting rexio
{quote} The Daily MACD is in a downtrend. At the same time the EA gives A BUY signal ?? Looks to me like a BUG in the EA. Also, the blue bar in the macd will take at least 2 to 3 days to develop.It will by no means be there tomorrow. When, inspite of all this, you decide to buy, then this is a decision, made because of price action, not because of the thirdscreen system.
Rexio, as I understand it the EA takes it's direction from the MACD signal lines and not the histogram.


I prefer to use the histogram because it is easier visually for me but the lines may change slightly earlier hence giving a buy signal on Nzd/Jpy.


Each histogram bar is representing 1 day and mine is red but could change to blue tomorrow.
  • #1,816
  • Jun 19, 2013 3:46am Jun 19, 2013 3:46am
Rexio,

This strategy has proven itself to be profitable even when traded with the EA that you say is bugged! 60%+ and 16,000 pips later and you are still talking about bugs in the EA and talking about D1 MACD bars not turning colors in 2-3 days at least...

Do you want to make money or do you want to be right?

You understand that the statistics you are seeing on the Demo test linked to this thread were done mostly with the "bugged" EA you keep talking about right?

When will you start trading and making money and stop talking about programming? It's almost like you don't want to trade this strategy to make money...
  • #1,817
  • Jun 19, 2013 3:48am Jun 19, 2013 3:48am
Quoting 100PipsADay
{quote} Closing positions early when Histogram changes color is NOT recommended. Take a look at GBP/AUD for example. You would have experienced quite a few losses before getting back into the uptrend which lasted about 3 months! *Wait for SL or TP target to get hit then reassess that currency pair AFTER {image}
in gbpaud my macd adjustable in daily in buy condition but 100 pips macd in sell condition
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  • #1,818
  • Jun 19, 2013 3:55am Jun 19, 2013 3:55am
Quoting 100PipsADay
{quote} 1st Attachment - Recently Closed Positions 2nd Attachment - Current Open Positions 3rd Attachment - Current Balance & Equity Balance is basically flat and equity is down about 10%. {image} {image} {image}
9 Hours Later...

1st Attachment - Current Open Positions
2nd Attachment - Current Balance & Equity

I added one more AUD/JPY long position. Also, the EUR/AUD short position that I opened up about 9-10 hours ago is now 45 pips in profit

Balance & Equity is still basically the same...
Attached Image(s) (click to enlarge)
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  • #1,819
  • Jun 19, 2013 3:56am Jun 19, 2013 3:56am
Quoting davidtrader
{quote} in gbpaud my macd adjustable in daily in buy condition but 100 pips macd in sell condition {image}
Don't worry about it, this is due to different server times for brokers.

Don't go long at this point in time though, D1 MACD is about to cross over for you. This will probably happen with today's daily close!
  • #1,820
  • Jun 19, 2013 4:02am Jun 19, 2013 4:02am
Very interesting read.
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