Technical Trading Tips and Techniques by 
While the market is still essentially in consolidation mode, I thought I would bring up what I consider to be one of the highest-probability technical approaches to Forex trading. Many of you may be familiar with it. First originated by Dr. Alexander Elder in his book, Trading for a Living (John Wiley & Sons, 1993), the Triple Screen is a simple but ingenious multiple timeframe approach.
To trade the Triple Screen, you would begin with your favorite timeframe, and call it the intermediate chart. Multiply that timeframe by 4-to-6 times to get the long-term chart, and divide it by 4-to-6 to get the short-term chart. So for example, if you usually trade the 4-hour as your intermediate, you may choose the daily as your long-term and the 1-hour as your short-term.
On the long-term chart, which is your first screen, you would use trend-following indicators like moving averages, MACD, trendlines, etc., to decide whether to go long, sell short, or stay out of trading altogether due to a lack of trend.
On the intermediate chart, which is your second screen, you would use oscillators (Stochastics, RSI, etc.) to identify a likely pullback entry zone.
And on the short-term chart, which is the third screen, you might look for support/resistance breakouts in the direction of your planned trade to actually pinpoint the trade entry.
In sum, the Triple Screen is a classic technical methodology that, with practice and experience, can potentially contribute significantly to your trading approach.
- James
James Chen is the Chief Technical Analyst at FX Solutions, a leading Forex broker. He is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT) Level 3 candidate. At FX Solutions, Mr. Chen writes daily currency analysis, conducts forex trading seminars, and has authored numerous articles on currency trading and technical analysis for major financial publications. His upcoming book, Essentials of Foreign Exchange Trading
well now..
you should keep this post as sticky with a specific link on the right menu…folks tend to forget these things.
Hi James
I have observed that if one trades off stochs using multiple time frames, a sure winner is one when the stoch are moving out of overbought/sold area in the lower time frames, while it is still in the overbought/sold area in the higher time frame. However, if the indicator is between 20 & 80 in the higher timeframe, it is wiser to take trades in the direction set out in the higher time frame.
What is your experience?
Regards
su25
Hi su25,
Great observation! I have not actually observed what you have on the Stochastics, and I have been using multiple timeframes with Stochastics for a long time. But I will definitely check it out. Thanks again, su25!
- James
Hello James,
Could you explain what is the entry point and exit point in the triple screen??
Hi
What abt if we are using H1 to as intermedia ? so 15 or 5 min are the short term ?
cheers
Hello James,look at this scenerio: stoch says bullish on 1hr and 4hrs but overbought and on it’s way back,below 80 mark on daily chart.
Hi Mide,
Thanks for visiting! Please provide some more details on the setup so that I can comment on it. In the multiple timeframe strategy, the Stochastics would not actually be used on the shortest timeframe - only on the intermediate timeframe. Thanks, Mide!
James Chen
Hi James,
Just watched the webinar about multiple time frame, loved it.
http://transcripts.fxstreet.com/2008/09/multiple-timefr.html
I have some questions about it:
How does fibonaci fit to all of them? Fibonaci retracement and other S&R, such as pivot points, trendline can be drawn in every time frames. If we use multiple time frame, do we need to draw fibonaci retracement on each time frame? And do we need to draw long-term fibo retracement on intermediate, and short term time frame? Because it will look complicate.
And another silly question. How do you optimize the time frame zoom. Since if I zoom small enough, I can fit intermediate time frame into short-term, and long-term into intermediate time frame. It makes me confused and unabled to focus on what needs to be focused.
Thank you very much,
Again, great webinar.
Hi Tuan!
Very sorry for the late reply. To address your question, I didn’t incorporate Fibonacci analysis into that particular strategy. But it often makes a lot of sense to incorporate Fibonacci studies into your trading. And if you use a multiple timeframe methodology, it makes sense to draw it on the different timeframes. As for zooming, you don’t really need to zoom in and out to implement the multiple timeframe strategy. I would just view each timeframe as closely and clearly as possible, and just switch back and forth between the timeframes. Hope that helps. Thanks, Tuan!
James Chen
Hello James,
I too just watched the webinar and very much appreciate your taking the time to explain; could you share a sentence or two about the process for closing a buy/sell. Is there a similar process in reverse that you use? Thanks, Scott