Alexander Elder, a renowned trader and author, is the mastermind behind the Elder Impulse System. This innovative trading approach combines two essential indicators to uncover points where market trends accelerate or decelerate. In this article, we delve into the intricacies of the Elder Impulse System and demonstrate how to effectively apply it to your trading strategy.
Contents
- 1 Introduction to the Elder Impulse System
- 1.1 Interpreting the Elder Impulse Indicator: Green, Red, and Grey Price Bars
- 1.2 Constructing the Elder Impulse System
- 1.3 Selecting Timeframes for the Elder Impulse System
- 1.4 Identifying Long-Term Trends with EMA(65)
- 1.5 Using the Elder Impulse System on IQ Option: Opening Call and Put Options
- 1.6 The Essence of the Elder Impulse System: Trade Entry and Exit Strategies
- 1.7 Harnessing the Elder Impulse System to Confirm Trading Setups
- 1.8 Practicing with the Elder Impulse System on an IQ Option Demo Account
- 1.9 Conclusion
- 1.10 GENERAL RISK WARNING
Introduction to the Elder Impulse System
The Elder Impulse System is a powerful trading tool that leverages two key indicators: a 13-day Exponential Moving Average (EMA) for trend identification, and the MACD-Histogram to gauge trend momentum. By combining these indicators, traders receive valuable insights to guide their trade entry decisions.
Interpreting the Elder Impulse Indicator: Green, Red, and Grey Price Bars
The Elder Impulse Indicator color-codes price bars, making it easy to interpret market signals. Green price bars indicate bullish dominance, red price bars signify bearish dominance, and grey price bars reflect an undecided market.
Constructing the Elder Impulse System
To build the Elder Impulse System, traders must first understand the relationship between the 13-day EMA and the MACD-Histogram. Green price bars form when both indicators are rising, while red price bars occur when both indicators are declining. Grey price bars appear when neither the bulls nor the bears hold sway.
Selecting Timeframes for the Elder Impulse System
Alexander Elder suggests that traders choose an intermediate timeframe they prefer, and then multiply it by five to determine the long-term timeframe. While the specific timeframes can vary, the important aspect is to ensure that the chosen timeframes are in alignment with the larger market trend.
Identifying Long-Term Trends with EMA(65)
To identify long-term trends, traders can utilize the EMA(65) by adding it to their charts. A closing price above the EMA(65) indicates an uptrend, while a closing price below the EMA(65) signifies a downtrend.
Using the Elder Impulse System on IQ Option: Opening Call and Put Options
To open a Call option, confirm an uptrend by ensuring the candle closes above the EMA(65). Wait for a green price bar to appear in the Elder Impulse System window, and then enter the trade when the next candle begins to develop. For a 5-minute chart, open a position with a duration of three candles, or 15 minutes.
For a Put option, confirm a downtrend by verifying the price closes below the EMA(65). Look for a red price bar on the Elder Impulse System graph, and then open a Put option with a duration dependent on the chosen timeframe.
In our example, we use 5-minute candles and open transactions lasting 15 minutes.
The Essence of the Elder Impulse System: Trade Entry and Exit Strategies
Elder emphasizes the importance of cautiously entering trades while exiting quickly and safely. Many novice traders tend to rush into the market without thorough analysis and hold onto positions for too long, hoping for the price to move in their favor.
By adopting the Elder Impulse System, traders can develop more disciplined entry and exit strategies.
Harnessing the Elder Impulse System to Confirm Trading Setups
The Elder Impulse System serves as a powerful tool for confirming trading setups. By providing an additional layer of verification, it helps traders avoid false entry signals and improve the overall effectiveness of their trading strategies.
Practicing with the Elder Impulse System on an IQ Option Demo Account
Before integrating the Elder Impulse System into your live trading, it's crucial to familiarize yourself with its nuances by practicing on an IQ Option demo account. This will allow you to gain a deeper understanding of the indicators and fine-tune your approach without risking real capital. Don't forget to share your experiences and results in the comments section below.
Conclusion
The Elder Impulse System is a valuable addition to any trader's toolkit. By combining trend identification and momentum measurement, it helps traders uncover crucial points where market trends accelerate or decelerate.
With careful application and practice, the Elder Impulse System can significantly enhance your trading performance and boost your confidence in the market. Good luck and happy trading!