Elder’s Triple Screen trading system is a powerful multi-timeframe approach developed by Dr Alexander Elder. It helps traders filter out false signals and align trades with the dominant trend while finding high-quality entries in the shorter-term movements. By combining different timeframes and indicators, the Triple Screen system improves timing and decision-making significantly.

In this article, we explain how Elder’s Triple Screen works and how to apply it to trade more effectively across markets.

What is Elder’s Triple Screen?

Elder’s Triple Screen is a three-step trading system that analyses the market on three different levels:

• First Screen: Identifies the long-term trend using a trend-following indicator.
• Second Screen: Spots corrections against the trend using an oscillator.
• Third Screen: Times entries on the short-term chart using breakout or momentum strategies.

By combining these three perspectives, the Triple Screen filters out poor trades and focuses only on high-probability setups.

Why Elder’s Triple Screen Works

• Multi-timeframe Analysis: Aligns trading with the broader trend.
• Combination of Indicators: Uses both trend-following and counter-trend tools.
• Reduces False Signals: Filters out bad trades by requiring confirmation across screens.

How to Apply Elder’s Triple Screen

Here’s a structured approach to using the system:

1. First Screen: Identify the Long-Term Trend

• Timeframe: Higher timeframe (e.g., Weekly chart if you trade on Daily).
• Indicator: Trend-following indicators like the Moving Average, MACD, or SuperTrend.

How to use it:

• Bullish Trend: If the indicator shows an uptrend, look only for buy signals.
• Bearish Trend: If the indicator shows a downtrend, look only for sell signals.

This keeps you trading in the direction of the major trend.

2. Second Screen: Spot Corrections Against the Trend

• Timeframe: One step lower than the first screen (e.g., Daily if the first screen is Weekly).
• Indicator: Oscillators like the Stochastic, RSI, or Force Index.

How to use it:

• In an uptrend, wait for the oscillator to indicate oversold conditions (temporary weakness).
• In a downtrend, wait for the oscillator to indicate overbought conditions (temporary strength).

This allows you to enter during pullbacks, not at stretched highs or lows.

3. Third Screen: Execute the Trade

• Timeframe: One step lower again (e.g., 4-hour if the second screen is Daily).
• Tool: Price action, breakout strategies, or trailing stops.

How to use it:

• Enter when the price confirms the resumption of the primary trend, such as breaking above a minor resistance in an uptrend or below support in a downtrend.

Alternatively, use trailing stop methods (such as buying on intraday pullbacks) to ride the trend.

Example of Elder’s Triple Screen in Action

• First Screen (Weekly): MACD shows an uptrend.
• Second Screen (Daily): RSI dips below 30 (oversold) indicating a pullback.
• Third Screen (4-Hour): Price breaks above short-term resistance. Enter a long position.

This layered approach ensures you are buying pullbacks in an uptrend, not chasing highs.

Best Practices for Elder’s Triple Screen

• Stay Patient: Only trade when all three screens align properly.
• Use Suitable Timeframes: Choose timeframes that make sense for your trading style (e.g., weekly/daily/4-hour for swing traders).
• Risk Management: Always apply proper stop-losses and calculate risk based on the setup.

Common Mistakes to Avoid

• Ignoring One of the Screens: Skipping a step weakens the system’s reliability.
• Using Random Timeframes: Keep the relationship between timeframes logical (e.g., higher timeframe 4-5 times the lower one).
• Overcomplicating with Too Many Indicators: Stick to one trend indicator and one oscillator for clarity.

Advantages of Elder’s Triple Screen

• High-Probability Trades: Ensures alignment with the major trend.
• Balanced Approach: Combines trend following and counter-trend strategies intelligently.
• Works Across Markets: Suitable for forex, stocks, indices, and commodities.

Conclusion

Elder’s Triple Screen strategy offers a robust and disciplined framework for trading across multiple timeframes. By aligning yourself with the larger trend, entering during pullbacks, and timing your trades with precision, you can significantly improve your trading outcomes.

To master multi-timeframe strategies like Elder’s Triple Screen and elevate your trading to the next level, explore our expert Trading Courses designed for serious traders seeking lasting success.