Forex

The Triple Screen trading system was developed by this author and has been
used for trading since 1985. It was first presented to the public in April 1986,
in an article in Futures Magazine.
Triple Screen applies three tests or screens to every trade. Many trades
that seem attractive at first are rejected by one or another screen. Those
trades that pass the Triple Screen test have a higher degree of profitability.
Triple Screen combines trend-following methods and counter-trend techniques.
It analyzes all potential trades in several time frames. Triple Screen is
more than a trading system, it is a method, a style of trading.

Trend-Following Indicators and Oscillators

Beginners often look for a magic bullet-a single indicator for making
money. If they get lucky for a while, they feel as if they discovered the royal
road to profits. When the magic dies, amateurs give back their profits with
interest and go looking for another magic tool. The markets are too complex
to be analyzed with a single indicator.
Different indicators give contradictory signals in the same market. Trend following
indicators rise during uptrends and give buy signals, while oscillators
become overbought and give sell signals. Trend-following indicators
turn down in downtrends and give signals to sell short but oscillators become
oversold and give buy signals.
Trend-following indicators are profitable when markets are moving but
lead to whipsaws in trading ranges. Oscillators are profitable in trading
ranges, but give premature and dangerous signals when the markets begin to
trend. Traders say: "The trend is your friend," and "Let your profits run."
They also say: "Buy low, sell high." But why sell if the trend is up? And
how high is high?
Some traders try to average out the votes of trend-following indicators
and oscillators. It is easy to rig this vote. If you use more trend-following
tools, the vote will go one way, and if you use more oscillators, it will go the
other way. A trader can always find a group of indicators telling him what he
wants to hear.
The Triple Screen trading system combines trend-following indicators
with oscillators. It is designed to filter out their disadvantages while preserving
their strengths.