Today’s article would be delving into the impulse trading system as elaborated by Alexander Elder. The essence of the strategy is simple: we buy when the price rises and sell as soon as the growth rate slows down.
A necessary condition for success is to trade on the timeframe where the average price movement in the trend is not less than 10 spreads of your currency pair for the Euro, its
20 pips. We would need two indicators for trading with the impulse system, the moving average and the MACD. It’s of due importance we learn and practice how to apply the two Indicators (Moving average and the MACD).
If you want to apply this system perfectly, then watch the step by step impulse trade video .
The moving average helps to identify the face of the trend, when the moving average is below the chart and is rising we assume the prescience of a bullish trend, if the moving average is above the chart and is falling there is a bearish trend .The MACD indicator is used to estimate the speed of changes, if the MACD histogram is above the signal line it indicates a good speed of growth, Accordingly if the MACD histogram is below the signal line it indicates a good falling speed.
If the signals of the moving average and the MACD coincide with each other we open a deal.The deal is closed when one of the indicator stops giving a buy signal, in other words any noise that doesn’t necessarily mean a change in the trend can knock you out of the market. This is why this strategy won’t allow you to take more than 15 to 25% of the trend nevertheless; the strategy is reliable and unpretentious if it is used correctly.
Mr. Elder also states that it’s necessary to filter signals in accordance with the Triple Screen System. Thus it becomes possible to open the deal only after identifying the direction of the trend on a larger timeframe. The impulse trading systems requires care in opening the positions and one must close the positions quickly such a professional approach to trading is totally opposite to the style of a non professional. The beginner would usually open deals without thorough analysis and endlessly postpone closing them in the hope that the market would turn to all the favorable direction the results of such trading are obvious. It should also be noticed that methods of Alexander Elder aint just a mechanical approach but are more likely the method of trading on the exchange this is as if one is trying to find islands of order in an ocean of chaos. The moment when the crowds is disorganized most of the time falls under the influence of powerful trend all will rush in one direction.
The impulse trading system requires a high level of self discipline because it isn’t easy to give an instruction to the broker when the market is already running. It’s even harder to close a profitable position without waiting for a trend reversal, never feel sorry that you’ve close the deals before the trend reach its end. Never use this system if you tend to show a lack of self discipline.
A necessary condition for success is to trade on the timeframe where the average price movement in the trend is not less than 10 spreads of your currency pair for the Euro, its
20 pips. We would need two indicators for trading with the impulse system, the moving average and the MACD. It’s of due importance we learn and practice how to apply the two Indicators (Moving average and the MACD).
If you want to apply this system perfectly, then watch the step by step impulse trade video .
The moving average helps to identify the face of the trend, when the moving average is below the chart and is rising we assume the prescience of a bullish trend, if the moving average is above the chart and is falling there is a bearish trend .The MACD indicator is used to estimate the speed of changes, if the MACD histogram is above the signal line it indicates a good speed of growth, Accordingly if the MACD histogram is below the signal line it indicates a good falling speed.
If the signals of the moving average and the MACD coincide with each other we open a deal.The deal is closed when one of the indicator stops giving a buy signal, in other words any noise that doesn’t necessarily mean a change in the trend can knock you out of the market. This is why this strategy won’t allow you to take more than 15 to 25% of the trend nevertheless; the strategy is reliable and unpretentious if it is used correctly.
Mr. Elder also states that it’s necessary to filter signals in accordance with the Triple Screen System. Thus it becomes possible to open the deal only after identifying the direction of the trend on a larger timeframe. The impulse trading systems requires care in opening the positions and one must close the positions quickly such a professional approach to trading is totally opposite to the style of a non professional. The beginner would usually open deals without thorough analysis and endlessly postpone closing them in the hope that the market would turn to all the favorable direction the results of such trading are obvious. It should also be noticed that methods of Alexander Elder aint just a mechanical approach but are more likely the method of trading on the exchange this is as if one is trying to find islands of order in an ocean of chaos. The moment when the crowds is disorganized most of the time falls under the influence of powerful trend all will rush in one direction.
The impulse trading system requires a high level of self discipline because it isn’t easy to give an instruction to the broker when the market is already running. It’s even harder to close a profitable position without waiting for a trend reversal, never feel sorry that you’ve close the deals before the trend reach its end. Never use this system if you tend to show a lack of self discipline.