A Easy Guide to the Elder Impulse System in Crypto Trading

You are already aware that finding a good combination of trading indicators can lead to an excellent trading strategy. Some indicators save us the trouble of searching for new combinations since they are already perfect combinations of different efficient indicators. There is always an advantage in mastering such indicators. If you are interested in learning about one such indicator, you should explore the Elder Impulse System Indicator, known as the ‘indicator or indicators.’ Let’s dive into it. 

1. Elder Impulse System: All You Should Know

The Elder Impulse System is a powerful technical analysis tool used in crypto trading by professional cryptocurrency traders. It combines two different indicators. Crypto traders use it to help figure out the best times to buy and sell cryptos and also to recognise when a trend in the market might change direction.

1.1. The Origin of Elder Impulse System Explained

The Elder Impulse System was created by a well known trader and author named Alexander Elder. He combined two important indicators into one system. These indicators are the Moving Averages and the MACD (Moving Average Convergence and Divergence). 

2. Working of Elder Impulse System: Short & InDepth

The Elder Impulse System combines two indicators: a 13-day Exponential Moving Average and a MACD-Histogram. Each of these indicators has a specific job. The EMA helps us see the trend in the market, like whether prices are generally going up or down. On the other hand, the MACD-Histogram helps us figure out how fast prices are changing, or the momentum. If the EMA is going up, it suggests an uptrend, and if the MACD-Histogram is positive, it shows strong momentum. 

3. How Does Elder Impulse System Appear

The Elder Impulse System Indicator is shown using candlesticks that come in three colours: Green, Red and Blue. Green Candles represent periods of bullish market. Red Candles correspond to periods of bearish market. And, Blue Candles indicate mixed indications. 

4. Calculating Elder Impulse System: The Simplest Method

Let’s break down the calculation of the Elder Impulse System.

• Green Price Bar

Green = (13-period EMA > pervious 13-period EMA) and (MACD-Histogram > previous period’s MACD-Histogram)

A green price bar occurs when the currency 13-period EMA is higher than the previous 13-period EMA, and the current MACD-Histogram is greater than the previous MACD-Histogram.

• Red Price Bar

Red = (13-period EMA < previous 13-period EMA) and (MACD-Histogram < previous period’s MACD Histogram)

A red price bar happens when the current 13-period EMA is lower than the previous 13-period EMA, and the current MACD-Histogram is less than the previous MACD-Histogram.

• Blue Price Bar

If the conditions for a green or red price bar are not satisfied, the price is coloured blue.

Notably, the MACD-Histogram used in the system is based on the MACD (12, 26, 9). 

5. Steps to Launch Elder Impulse System on a TradingView Chart

Here are the steps to launch the Elder Impulse System on a TradingView chart:

• Open your TradingView chart
• Click on ‘Indicators’ at the top
• Search for ‘Elder Impulse System’ in the search bar
• Click on it to add it to your chart
• Adjust the settings if needed
• Start analysis using the indicator

6. How to Interpret Elder Impulse System

Here is the simplest way to interpret Elder Impulse System:

• Green Bar

When we see a green bar, interpret that the market is in an upward trend with strong momentum.

• Red Bar

When we see a red bar, assume that the market is in a downward trend with weak momentum.

• Blue Bar

When we see a blue bar, interpet that there is no clear signal for a strong upward or downward trend.  

Also Read: Gann Fan Decoded: Navigating Cryptocurrency Trends with Precision

Endnote

In conclusion, the Elder Impulse System is a valuable tool for cryptocurrency traders, helping them make informed decisions in the dynamic crypto market. Developed by Alexander Elder, it combines Moving Averages and MACD indicators. We have discussed its origin, functionality, appearance, calculation, implementation on TradingView, and interpretation of its signals. By understanding the Elder Impulse System, traders can navigate crypto trading with more confidence.