Expert: Christopher Stone - 9/9/2005

Question
Hello:

I want to thank you for the reply and information. I found it helpful!
If I understand correctly, when all three charts with the same oscillator, for example RSI, indicate a buy signal, that is the time to buy. Is this correct?

I thank you for your follow-up reply.
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Followup To
Question -
Hello:

I am interested in learning more about the triple-screen trading technique that Alexander Elder wrote about in his book; however, I am having some difficulty understanding his technique.  Perhaps you can explain in more simple terms how this technique should be used.

For example, using the RSI, ROC, or momentum oscillators, how should this trading technique be used?

I thank you for your reply and any helpful information that you may provide.
Answer -
Hi there,

Thank you very much for your question, I'll be happy to help you as much as I can.  The "Triple-screen Trading Technique" is very simple to understand.  Triple-screen simply means that you review a stock's chart in three different time frames.  For a swing trader, I would suggest using a weekly chart (each bar equals one week), a daily chart (each bar equals one day), and a five-minute chart (each bar equals five minutes).  The RSI, ROC, and other oscillators can be used with all three time-frames.  A trader is interested in making a trade when all three time-frames are consistent with the trade.

cs

Answer
Thanks again for your question.  Basically, you are correct.  When everything is in synch is a good time to look for an entry; however, it is not a good idea to rely on only one indicator.  A successful trader will use price data, oscillators, momentum indicators, moving average ribbons, and market internals to zero in on trades that provide a greater reward over risk.  Good luck to you on your learning.

cs