Elder Impulse System Indicator
MT5Also Available for MT4Elder Impulse System Indicator for MT5 provides trend based forex trading signals with BULLISH BEARISH and NEUTRAL signals.
Description
The Elder Impulse System indicator for MT5 provides forex trend trading signals. The indicator is based on the MACD and exponential moving averages – EMA and determines the strength of the trend. As a result, it provides a histogram with BULL, NEUTRAL and BEAR trend signals. So forex traders can use them to BUY and SELL as well as exit early.
Most traders using trend trading strategies enter the market as quickly as possible and stay in the market for a long period of time, hoping that the market will trend for longer. But Alexander Elder designed the system to enter the market only when the trend is confirmed, and exit the market as early as possible, contrary to the opinion of many technical traders.
This justifies the presence of a NEUTRAL histogram band. It is imperative that most followers of this system exit when a neutral histogram bar appears, however, many traders are still waiting for the opposite signal bar to exit. Thus, traders should apply the exit rules at their own discretion.
The indicator works well for beginners and experienced forex traders. It can be applied to all intraday timeframes and higher timeframe price charts, including daily, weekly and monthly charts.
Elder Impulse System indicator for MT5 trading setup
The USDCAD H4 price chart above shows the Elder Momentum System Indicator for MT5 in action. The indicator is a three-color histogram with BULLISH histogram bars shown in GREEN, BEARish bars in RED, and NEUTRAL bars in BLUE.
Forex traders should enter the market with a BUY position if the histogram shows a GREEN BULLISH bar. The best stop loss is below the previous swing low. On the other hand, traders may take profits if the histogram changes to a BLUE neutral band or a RED BEARish band.
Similarly, the appearance of a RED bar on the histogram indicates BEAR market dynamics. Thus, forex traders should enter into a SELL trade with a stop loss above the previous high. In addition, traders can exit a position with a profit if the color of the histogram changes to BLUE or GREEN.
The Elder Impulse system is a trend following trading system. Thus, in order to achieve the best trading results, forex traders should apply a top-down approach to technical analysis. Since the trend on higher timeframes tends to last longer. Forex technical traders should use the higher time frame to determine the direction of the trend. Alexander Elder recommends using two different timeframes. One for determining the trend and the other for entering and exiting the market. In addition, the older timeframe for determining the trend must be 5 times larger than the trading timeframe.
Thus, forex traders should identify the trend on the higher time frame chart and use the lower time frame chart to find the best entry point.
Conclusion
The Elder Momentum System Indicator for MT5 is great for forex traders using trend following technical strategies. However, for best results, forex traders should confirm signals using price action, support and resistance lines, trend lines, or channels. In addition, the indicator is free to download and easy to install.
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