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EIS

Elder Impulse System (EIS) is a technical indicator developed by Dr. Alexander Elder that combines a trend indicator and a momentum oscillator to determine the direction and strength of market movement.

To use the indicator, you need to use the ElderImpulseSystem class.

Description

The Elder Impulse System (EIS) is a simple yet powerful tool for visualizing market momentum. It combines two indicators:

  1. Exponential Moving Average (EMA) - to determine trend direction
  2. MACD Histogram - to measure price movement strength and momentum

EIS classifies each candle on the price chart into one of three categories (usually denoted by different colors):

  • Green (strong bullish impulse) - when both indicators are rising
  • Red (strong bearish impulse) - when both indicators are falling
  • Blue or neutral (no clear impulse) - when indicators move in opposite directions

EIS is particularly useful for:

  • Quickly visually determining trend direction and strength
  • Identifying entry and exit points in the direction of the main trend
  • Identifying potential reversal points
  • Filtering out false signals

Calculation

Elder Impulse System calculation involves the following steps:

  1. Calculate 13-period exponential moving average (EMA):

    EMA = EMA(Close, 13)

  2. Calculate MACD Histogram (standard values: 12, 26, 9):

    MACD Line = EMA(Close, 12) - EMA(Close, 26)
Signal Line = EMA(MACD Line, 9)
MACD Histogram = MACD Line - Signal Line

  3. Determine color classification for the current candle:

    If EMA[current] > EMA[previous] AND MACD Histogram[current] > MACD Histogram[previous], then Green (Bullish Impulse)
If EMA[current] < EMA[previous] AND MACD Histogram[current] < MACD Histogram[previous], then Red (Bearish Impulse)
Otherwise Blue (No Impulse)

Interpretation

The Elder Impulse System is interpreted as follows:

  1. Green Candles (strong bullish impulse):

    • Indicate a strong upward momentum
    • Best time to buy or hold long positions
    • A series of green candles indicates a strong upward trend

  2. Red Candles (strong bearish impulse):

    • Indicate a strong downward momentum
    • Best time to sell or hold short positions
    • A series of red candles indicates a strong downward trend

  3. Blue Candles (no clear impulse):

    • Indicate uncertainty or consolidation
    • Signal a possible slowdown or trend reversal
    • Often appear during consolidation periods or before a trend change

  4. Trading Strategies:

    • Buy when candles change color from blue to green
    • Sell when candles change color from blue to red
    • Close long positions when candles change color from green to any other
    • Close short positions when candles change color from red to any other

  5. Trend Confirmation:

    • A sequence of green candles confirms an upward trend
    • A sequence of red candles confirms a downward trend
    • Color alternation indicates a sideways trend or uncertainty

indicator_elder_impulse_system

See Also

EMA MACD MACDHistogram ForceIndex

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