Elder’s Indicators: Setting Up a System for Comfortable Trading

Introduction

In this article, I will discuss the comprehensive trading system introduced by Dr. Alexander Elder and explain how to use its elements effectively. This system is detailed in his books and webinars, including a YouTube video and a book.

Recently, I encountered issues with some indicators provided by Admiral Markets, as they stopped functioning correctly over the past six months. To continue using this system, I decided to develop my own versions of these indicators and make them available on the mql5 market. Perhaps they might be helpful to other traders as well.

Basics of Using a Trading Layout

The image below (imagine a visualization of Elder’s system) illustrates an example of a comprehensive layout.

  1. Working with Two Timeframes

For analysis and decision-making in trading, two timeframes are used:

  • Strategic timeframe – the larger timeframe (e.g., weekly chart).
  • Tactical timeframe – the smaller timeframe (e.g., daily chart).

The recommended ratio between the timeframes is 1:5.

  1. Four Key Zones of the Layout
  • First zone: price movement (main chart window).
  • Second zone: the combined OsMA indicator.
  • Third zone: the ATR indicator.
  • Fourth zone: the Force Index indicator.

Indicator Descriptions and Their Purpose

  1. ATR (Average True Range)

This indicator is used to set a protective stop-loss (SL).

  • Typically, 2 ATR from the current price is used.
  • ATR is freely available in MetaTrader 5.
  1. Force Index

Force Index is an oscillator used to confirm divergences.

  • The original version includes channels, but they are optional.
  • It is also freely available in MetaTrader 5.
  1. Combo OsMA

This indicator is an enhanced version of the standard OsMA, featuring:

  • A MACD line (black line).
  • A MACD signal line (orange line).
  • Color coding: green for rising histogram, red for falling histogram.

Note: This oscillator is primarily used to detect divergences. Free alternatives are hard to find, so I created my own version, Combo OsMA, available for MetaTrader 4 and MetaTrader 5 on mql5.

  1. Main Chart Window

The main chart includes:

  • Value Zone between EMA(13) (red line) and EMA(22) (blue line).
  • Candlestick color coding:
    • Red – prohibits buying.
    • Green – prohibits selling.
    • Blue – allows action in either direction.
  • Euphoria and Depression Channel: a range of 3 ATR from EMA(22).
    • Price rarely remains outside this channel, making these zones ideal for partial profit-taking targets.

The comprehensive indicator incorporating all these features is called Combo View Impulse System, available on mql5.

Conclusion

To fully recreate the layout shown in the video, you will need just four indicators:

  1. ATR (free).
  2. Force Index (free).
  3. Combo OsMA (paid, available on mql5).
  4. Combo View Impulse System (paid, available on mql5).

I hope these indicators help you improve your trading and make working with the layout more comfortable. Best of luck!

 

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