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Registered User
Joined: 6/24/2005
Posts: 38
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I am looking for a relatively mechanical system to trade with while I learn discipline and money management. Once I am convinced that I can be trusted, I will move on to more sophistocated trading techniques.
I am considering using Elder's triple screen system as my basis and developed a PCF (see my recent post in the PCF forum) to give buy signals based on a rising and negative weekly MACD (12,26,9) and a negative force index. These buy signals would trigger entering buy stops as described by Elder. I haven't quite yet detailed the mechanical selling signals.
Any thoughs on using this (or any other) system as a learning tool to teach discipline?
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Worden Trainer
Joined: 10/1/2004
Posts: 4,308
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The related work you posted in the PCF forum should be seen, so for the benefit of those considering a reply to the above, here is a link to your post which includes the PCF's you put together:
PCF for Buy Signals based on Elder's Tripple Screen
Thanks for sharing.
- Doug
Teaching Online!
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Registered User
Joined: 10/7/2004
Posts: 16
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In August, I attended a workshop by Dr. Elder. On the positive side, he uses TC 2000. On the negative side, he really doesn't know that much about using TC 2000. He has never taken the time to learn the nuances of the program.
Elder has an interesting strategy that was built on his Triple Screen system. In his Triple Screen System, he emphasizes that the markets exist in several time frames. Whichever frame you choose, the other time frames will impact it. If the daily is the favored timeframe, you must first go the next order time frame – the weekly.
The "Decision Process" that Elder uses involves five steps:
1. Review the industry indices
2. Review the stock groups within those identified indices.
3. Review the futures
4. Review Open positions
5. Review potential positions for the week ahead.
I probably have about 15 pages of notes on his seminar. Basically, he looks at the different indices, then at the best performing groups within those indices. While I would prefer to buy the best stocks within the best indices, Elder goes for the "dogs" of those best performing indices.
It is important to make the first sort on a time frame longer than you will use. If you use the Daily charts, do your initial selection based on the weekly charts. A stock has got to look good on the longer timeframe AND the shorter timeframe. (Screens 1 and 2). The third screen is not a screen but rather the entry point for buying the stock.
Elder's process involves an custom Excel spreadsheet (really pretty neat) and a selection process that takes about an hour per week. I would be happy to post the documents and handouts but I don't think that this system supports that. Suggestions?
Trader Bill
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Registered User
Joined: 7/12/2005
Posts: 6
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Trader Bill,
I believe I went to the same seminar (in Washington?). I did put together a couple of watchlists for the Indexes and Industry Groups, then a couple of PCFs to show the weekly check parameters. On Saturday, I'm then at least partially there. I'd like to automate the spreadsheet so that it could pull from the TC2000 database and automate the process, but haven't taken the time to get the development kit and do it.
Before posting, you might want to check with Dr. Elder. He may consider the spreadsheet proprietary.
- Ted
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Registered User
Joined: 10/7/2004
Posts: 16
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Yes, we probably did attend the same event -- the DC Moneyshow.
The spreadsheet that Elder used contained no copyright statement at all. At any rate, Elder's Triple Screen System approach is open to all.
Have you made use of Elder's approach? While I found it to be successful, I found an approach that was almost random (but used strong money management) to be equally profitable. All in all, a rather disturbing discovery.
The Triple Screen system uses multiple time periods to make a decision. I have found that to be critical to my success. When I trade based only on the daily trend (and ignore the weekly charts), I have consistently lost money.
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Registered User
Joined: 7/12/2005
Posts: 6
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I have just gone back to filling in the initial spreadsheet to get my bearings. I haven't religiously followed his approach, but have tried to take the multiple time frame approach in stock selection, then purchased ITM options on those stocks. Pretty successful this year, but I gave some of it back when the energy sector tanked a couple of months ago. I've tried to open up the gates a bit on his money management approach using options, but I have found it difficult to put together consistent rules that work. I had some great runups in the oil sector, then jumped back in too soon on the way down and took a couple of losses and gave a significant chunk of it back. Still learning...
But I can say that I've done better this year than I have in previous years, so I can't complain TOO much.
On the money management, Alex DID say that MM was probably the most important part, so it looks as if you might have confirmed that! 
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