Elder Impulse System

What is the Elder Impulse System?

The Elder Impulse System is a bar-coloring method from Alexander Elder that combines one trend input and one momentum input. Each bar is colored by the slope of an EMA (commonly 13-period) and the slope of the MACD histogram: green when both are rising, red when both are falling, and blue (neutral) when the two disagree.

Elder described it as a censorship system rather than a signal generator: it tells you what you may not do. Green bars forbid shorting, red bars forbid buying, and blue bars permit either side or standing aside. In his triple-screen approach the impulse color on a higher timeframe gates which direction may be traded on the lower one, which makes it closer to a higher-timeframe trend filter than an entry technique.

How traders use it

• As a trade censor: long entries are considered only while the impulse is green and shorts only while it is red, with blue treated as unrestricted or as a stand-aside state depending on the plan.
• As a timing cue: the color flip out of red or blue into green after a pullback is a common continuation prompt, still requiring its own entry trigger and exit rules.
• As a multi-timeframe gate: weekly impulse color restricts daily trades, or daily restricts intraday, following Elder's original triple-screen usage.