Elder Impulse Indicator

JJJJ

In using the Elder indicator in a shorter time frame.. id 5-15-30 min. I have seen cases where the price drops over several periods, however the impulse indicator still stays green during this time. Can you interpret this as to what the market is doing and what to anticipate going forward ? You would think that as the price drops, the indicator should turn blue or red.

markd

https://school.stockcharts.com/doku.php?id=chart_analysis:elder_impulse_system

The Chart School article says bars are green when the 13 day ema and MACD Histogram are both rising, red when both are falling and blue when they don't agree.

So, when the elder bars stay green although the price is falling, it suggests that prices have not fallen enough to change the direction of either the ema or the histogram (probably because this action follows a significant price jump within the range of the ema/histogram lookback period, or maybe somewhat longer, since emas never drop values, just weight them less and less).

Unusual price changes can mess up indicators. Also, although much has been made of the fractal nature of prices (i.e. the same rules apply across time frames), in fact, price behavior in shorter time frames can be quite different - usually more erratic. Also, the extreme activity at the opens and closes can distort indicators as well.

I don't use elder bars, so I can't offer an interpretation of this behavior. From what I have looked at, it seems that, like any indicator, it works better when the market is trending, but gives lots of late and/or false signals when it isn't.