The third screen in the triple screen as a place to stop orders
The third screen is for short-term time frame (short term). In accordance with the rules of triple screen system that divides the time frame by a factor of five to six, then if a long-term time frames (long term) weekly on the first screen, then the standard time frame (mid-term) on the second screen is a 5-day period and the time frame (short term) is daily.
The third screen is used to place a stop order, either buy stop or sell stop, depending on the analysis we have done on the first screen and the second screen. Buy stop technique is applied to the condition that the uptrend market and sell stop for a downtrend market conditions.
For example, if the weekly time frame bullish (uptrend) and the movement of the oscillator indicator 5-day time frame (second screen) is down, then we can put a stop buy order on the third screen in anticipation of an upward breakout. Conversely, if the time frame weekly on the first screen bearish (downtrend) and the movement of prices on the second screen (5-day) is rising, then we put a stop sell order on the third screen to anticipate beakout downwardly. Specifically, the placement of a stop buy order on the third screen with a technique called trailing buy stop and sell stop order placement technique is called with a trailing sell stop.
Techniques trailing buy stop and sell stop
If the bullish trend on the first screen and the indicator oscillator on the second screen is off, then buy stop orders can be placed at the level of a few pips above the previous highest level bar. For example, we use the 5-day time frame as a rule of thumb, if the trend in the first screen bullish (uptrend) and the second screen oscillator indicator (benchmark) is down, then we place a stop buy order at the daily time frame (third screen) a few pips above the highest level the previous day.
If the prices continue to rally, then we stop buy order will be subject to, and vice versa when the market sentiment is bearish then we stop buy order will not be touched. Ways otherwise applied to the stop sell order if the trend is bearish on the first screen. This technique will show you the best time to open a position if the ripple (ripple) on short-term time frame has gained enough momentum to follow the wave (wave) time frame of reference (second screen) and tides (tides) the current time frame for long-term (first screen).
Level of stop loss and exit
To stop buy order, stop loss level can be placed on several pips below the lowest price of the current bar or earlier, whichever is lower, and vice versa for a sell stop order. Level can exit when the second screen oscillator indicator has been saturated (overbought or oversold), or when the first screen trend reversed direction, in accordance with the risk / reward ratio in our trading plan.
Changing the time frame in metatrader platform
In addition, to make the time frame that is less common, can be done on the MetaTrader platform. For example, to make a 5-day time frame, we first entered into the daily time frame, then go to the Navigator - Scripts - Conversion Period, and change the parameters ExtPeriodMultiplier into: 5 (see figure below), then click OK.
Open the 5-day time frame (D5) in offline mode (File - Open Offline). D5 will be updated every 2 seconds (default) while D1 chart (daily) remains open.
Read Other Bellow
