Triple Screen System

Triple screen reaches strategic decision on long-term charts, using trend-following indicators—this is the first screen. It proceeds to make tactical decision about entries and exits on the intermediate charts, using the oscillators—this is the second screen, which we may implement using either intermediate- or short-term charts.

 

First screen

indicator:

Slope of the weekly MACD-Histogram

Slope of the weekly exponential moving average (26-week EMA)

Other like Directional System or trendlines.

 

When both EMA and MACD-Histogram are in gear, they confirm a dynamic trend and encourage trading larger position. When MACD-Histogram is moving opposite the EMA, warning of high volatility ahead. The relatively easy money is off the table.

 

Divergences between weekly MACD-Histogram and prices are the strongest signals in the technical analysis, which override the message of EMA.

 

Screen Two

When the weekly trend is up, wait for daily oscillators to fall, giving buy signals. Buying dips is safer than buying the crests of waves. If an oscillator gives a sell signal while the weekly trend is up, you may use it to take profit on long positions but not to sell short.

 

Indicator:

For conservative investor: choose a relatively slow oscillator, such as daily MACD-Histogram or Stochastic.

For active traders: use the two-day EMA of Force Index (or longer, depends on your research and testing). When the weekly trend is up and daily Force Index falls below zero, it flags a buying opportunities.

Can also use Momentum, Relative Strength Index, Elder-ray, etc.

 

Set the stop:  SafeZone part.

Money Management Formulas: risk no more than 2% of your equity.

 

Ways to Exit Position:

1: Set profit target, take profit only when the EMA turns flat.

2: take profit whenever prices on the daily charts hit their channel line.

 

Screen Three

Use daily data to pinpoint entry points:

1: Use an intraday breakout or pullback to enter trades without real-time data;

2: Use the real-time data, if available, for entering trades.