According to some estimates, more than 40% of the professionals anyway enjoy this system. Moreover, it is the simplest and most famous of the public systems, and we recommend that beginners start with her.
TC was created by Alexander Elder in 1985 and since then, she actually has not changed, indicating that its reliability and broad applicability, as the stock market and the Forex market.
It's no secret that the main problem of trading is that the same indicator can give conflicting signals to trade in different time scales. For example, it may indicate an uptrend on the daily chart and the downtrend on the hourly chart. In other words, the indicators are contradictory, and trading signals depending on the time period schedule.
And this problem is only one solution: Split decision on several stages, analyzing different time frames using different tools.
Without a doubt, the best way to come to a clear separation method provides three screens. You build a schedule 3 and analyze them sequentially.
First select the "average" screen - that this time scale, which best matches the duration of preservation of the opening position (usually a four-hour or hourly chart.)
Next, select a long-term and short-term scale, which in order are different from the average, for an average screen dnevok are, respectively, a day (four hours) and time (15 - or 5 - minute) charts.
The analysis in the "triple screen" begins with a long-term schedule. The system refers to the trend, and the first problem, which is worth it - the definition of the basic long-term trend in the direction of which is worth playing, and his condition - a beginning, middle or end.
Accordingly, on this chart to use trend indicators, chief among which is the MACD-Histogram. The trend is determined by the last two lines or points histogram: histogram rising, when the last point above the previous one, indicating an upward trend, downward histogram indicates the need to play to sell.
Keep in mind that:
- Twist or fall says about the end of the histogram and the trend turns.
- Turns up, occurring below the zero line, give stronger signals to buy, what turns above this line.
- Turns down, taking place above the zero line, give a stronger trading signals on sale, what turns below the zero line.
It is recommended to use multiple indicators of trends to avoid false alarms. The basic rule is to play only in the direction of trends identified in the first long-term "screen".
For example, at some point in time, we see on the chart H4 bright bullish trend:
Histogram MACD is in positive territory and raises.
On the second screen average is necessary to identify the movement against the major trend - "the wave that runs against the tide." It's like yellow lights - need to start preparing for the transaction, the reversal of the trend correction will point to the possibility of buying or selling.
In the primary uptrend on the first screen, for example, the four hour chart, hourly downs indicate the possibility of purchase, at a weekly downtrend daily ups indicate the potential for sales at the end of the identified correction. On the second screen to use the signalmen, such as RSI, Stochastic, etc.
In this case:
- A buy signal is applied, if the first screen of the trend is up, and a signalman on the second screen, such as RSI, fell below the 20% oversold and starting to recover;
- A sell signal is applied, if the first screen downward trend, but the RSI is on the second screen up above the overbought 80% and begins to fall.
We assume. In the figure we see the perfect moment: Stochastic turned after correction and gave the order to purchase.
"Third screen" is not even a schedule - a method of placing orders to buy or sell depending on the location of the indicators from the previous two graphs. Elder calls him a "sliding order."
t; span style = "color: black;"> So, if the main trend is up, and correction - down, moving the signals at the time of purchase capture the top breaks a resistance level. The method of moving about the purchase order is triggered when, for example, the screen for long-term weekly trend is up, and a signalman on the second day the screen drops. Place an order to purchase a little above the previous day. With the rise in prices for the purchase of the position should be opened as soon as the price rises above the crest of the previous day to put up the level. If prices continue to decline, it will not affect the order of purchase. Then the lower order of the day at one tick above the last high prices.
"Keep a daily basis to lower the order of sale, until it is touched, or until the week indicator, turning down, will not cancel the signal of the purchase."
If the main trend is down, and correction - up and moving sell signal capture time of the lower support level breaks. At week's downward trend, wait until the rise of day signalman does not employ the method of moving the order of sale. Place an order to sell a little below the low of the last day. As soon as the forex market will turn down, you automatically open position for a fall.
If prices continue slide on a daily basis the level of orders to sell a few ticks below the low of the last candle. The purpose of the method of moving the order of the sale - to capture the moment an intraday low breakthrough. The order comes to power when the day breaks the uptrend, and a week-long downward trend again comes into its own.
How to place protective orders in the triple screen
Stop-loss orders to lock in position to increase should be placed slightly below the low of the previous game or the day - at least two.
Stop-loss orders to lock in position for a fall should be set slightly above the maximum of this or the previous day's play - at most two. Further orders can be shifted in the course of the market.
Now let's see how well we forecast the market
