Guide · Trend following
Does Elder Triple Screen work?
Across 375 stocks, Elder Triple Screen cut the worst fall on 93%, beat buying and holding on risk-adjusted return on 9% and on raw return on 10%. Mainly a seatbelt: it softened the big falls on most stocks, but usually gave up return to do it.
What it predicts
Three screens in a row: the weekly trend must be up, the daily chart must show a pullback, and price must then break the previous day's high. Out when the weekly trend turns down.
- In when, as of yesterday, the weekly MACD histogram (12, 26, 9) was rising and the 2-day average of the Force Index (price change × volume) was below zero, and today's close is above yesterday's high.
- Out when the weekly histogram turns down, or on a close below the lower of the entry day's and the previous day's lows (the protective stop).
Trend following plays bet that prices that have been rising tend to keep rising for a while, and falls tend to keep falling. The family guide
How to use it
- It trades often (about 9 switches a year per stock), so costs, spreads and taxes eat into it more than the backtest's 0.05% per switch suggests.
- Expect to be wrong more often than right: only 34% of its calls worked. Its results come from the size of the winners, so following it means sitting through strings of small losses.
- It sits in cash much of the time (holding on about 27% of days), so judge it on risk-adjusted return rather than on matching a rising market.
- It worked best on Financials (23% beat holding on risk-adjusted return) and worst on Big tech (0%).
- Use it as one input. Your signal combines the plays you count with the other factors you weight into one call.
When it worked
Elder Triple Screen did best against holding in the COVID drop (+25% median gap) and worst in the 2020–21 rally (−37%). Median gap in return against holding the same stock (per year over stretches longer than 18 months; crypto excluded).
| 2008 crash | Recovery 2009–19 | COVID drop | 2020–21 rally | 2022 bear | Since Oct 2022 | |
|---|---|---|---|---|---|---|
| Elder Triple Screen | +25% | −14% | +25% | −37% | +13% | −11% |
Where it worked
By kind of stock: how often it beat holding on risk-adjusted return, and the median Sharpe ratio gap.
| Group | Beat holding, risk-adjusted | Sharpe gap |
|---|---|---|
| Financials | 23% | -0.22 |
| Industrials & rentals | 22% | -0.24 |
| Micro caps | 17% | -0.42 |
| Software & devices | 15% | -0.28 |
| Healthcare | 11% | -0.27 |
| Real estate | 11% | -0.15 |
| Media & telecom | 10% | -0.27 |
| Semiconductors | 9% | -0.36 |
| Industrials & materials | 8% | -0.32 |
| Metals & mining | 8% | -0.37 |
| Energy & power | 7% | -0.30 |
| Consumer & retail | 3% | -0.41 |
| Sectors | 0% | -0.33 |
| Indexes & ETFs | 0% | -0.16 |
| Big tech | 0% | -0.30 |
Where it helped most
Sharpe ratio gap against holding, stocks with 3+ years of history
Right now
Elder Triple Screen holds 69 of 377 names as of the Oct 13, 2026 close.
Changed its call in the last two weeks:
Backtest results since 2005 (or as long as each stock has traded), against holding the same stock over the same dates, after 0.05% per switch. Past results don't promise future ones. This analysis does not constitute trading advice. Please meet with an advisor or independently review sources before making any decision.