Elder Impulse System for Swing Trading

[Bob Scott]

 I have been looking at the Elder Impulse system for timing and entry and exit rules. Does anyone here use it? From what I see, it measures both the trend and momentum using an EMA and MACD and colours the bars green red or blue depending on the various combinations possible. Would appreciate any information you have
thanks
Bob

[kunal desai]

I am not familiar with it.  what does it do?  In trading there are very few mechanical systems that work. But in conjunction withother tactics you might be able to optimize some setups. keep testing it!

Bob

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Kunal Desai
www.bullsonwallstreet.com

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[Bob Scott]

The Elder Impulse System was designed by Alexander Elder and featured in his book, Come Into My Trading Room. According to Elder, "the system identifies inflection points where a trend speeds up or slows down". The Impulse System is based on two indicators, a 13-day exponential moving average and the MACD-Histogram. The moving average identifies the trend, while the MACD-Histogram measures momentum. As a result, the Impulse System combines trend following and momentum to identify tradable impulses.
The Elder Impulse System can be used across different timeframes, but trading should be in harmony with the bigger trend. Elder recommends setting your trading timeframe and then calling it intermediate. Multiply this intermediate timeframe by five to get your long-term timeframe. Traders using daily charts for an intermediate timeframe can simply move to weekly charts for a long-term timeframe. The choice is not as clear cut for smaller or longer timeframes. A little judgment is required. Traders using 10-minute charts to chart their "intermediate" timeframe can use 60-minute charts for their "long-term" timeframe. Investors using weekly charts can base the bigger picture on monthly charts. Once the trading timeframe is decided, chartists can then use the longer timeframe to identify the bigger trend.

A buy signal occurs when the long-term trend is deemed bullish and the Elder Impulse System turns bullish on the intermediate term trend. In other words, the weekly chart has to show a clear uptrend in order for a daily buy signal to be valid. Daily buy signals that happen when the weekly chart is not in a clear uptrend are ignored.

A sell signal occurs when the long-term trend is deemed bearish and the Elder Impulse System turns bearish on the intermediate term trend. For example, the weekly chart has to show a clear downtrend in order for a daily sell signal to be valid. Daily sell signals that happen when the weekly chart is not in a clear downtrend are ignored