Books & Trades # 191. March 31, Dr. Alexander Elder The Impulse System Education/ Traders Camp New Software Special.

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1 Books & Trades # 191 March 31, 2012 Dr. Alexander Elder The Impulse System Education/ Traders Camp New Software Special Dear Trader, I ve just returned from the Austrian Alps where I co-taught in a SpikeTrade workshop with live trading. Most of stayed in the mountains for a few days after the classes, skiing during the day and gathering to review markets in late afternoons, before dinner. One of our workshop participants wrote: It is a powerful thing to meet, and learn from others as well as from you and your guest instructors. Sometimes there are big pieces of information but often it is those little insights, how-to's and shifts that are so helpful. I love the diversity of people who show up at these events. It is really a special space that you create for growth in many areas.

2 I look forward to seeing readers of these letters in May at the SpikeTrade Reunion in Annapolis and then at our Pacific Traders Camp in Macao, described below. Let s now turn to the charts and explore one of the systems I use every day the Impulse System. The Impulse system was introduced in my 2002 book Come into My Trading Room and described in all my subsequent books. It s becoming more and more popular among traders, but many casual users misuse it. Some apply it to a single timeframe, while you must track at least two. Others think that green bars are to be bought and red ones to be short, which is a very lame interpretation. Let me clarify its rules The absolute key thing to keep in mind is this: the Impulse system is not a trading system. It is a censorship system. It does not tell you what to do. It tells you what you are not allowed to do. Green means no shorting allowed. Red means no buying allowed. Blue is neutral. Let s review the Japanese Yen for example, although these rules apply to stocks, futures, and all timeframes. The yen had a horrific slide. When its weekly chart, shown above, slid below the lower channel line, I became eager to buy, expecting a bounce, but the Red Impulse forced me to sit on my hands no buying allowed. As the weekly turned Blue, it released me to buy and I turned to the daily charts. I traded Yen long last week in the Alps and again this week in New York. You see, the Impulse system did not tell me to go buy Yen my other analysis did. The Impulse system simply kept me out of trouble, not letting me catch a falling knife. When it released me I turned to the dailies.

3 Here you see that on Tuesday the daily bar was Red no buying permitted. On Wednesday it turned Blue OK to buy. On Thursday it turned Green and in my view it is no longer the time to buy but to consider taking profits into strength. If you want to take the Impulse to the next level of sophistication, you can calculate at what level the Impulse color will change. I often use those levels when angling for entries and exits.

4 Take a look, for example, at this daily chart of Ultra Petroleum Corp. (UPL). The stock is building a bullish divergence on the weekly chart (not shown). The daily has cracked below support and stopped declining a potential false breakout, one of the strongest buy signals. The Impulse system is Red, prohibiting buying. Do you see faint yellow dots above the bars? I marked some of them with slanted arrows. Those dots are drawnby an indicator called MACD XOver it shows at what level the Red or the Green color will disappear and change to Blue. That might be a good level for a buy order. If you would like to follow up on this, MACD XOver is included in all of our elder-disks. CLASSES Please visit our website for more information on these events April 3 & 10, Webinar Current markets with Dr Elder. Enter Dr. Elder s trading room from your own computer and follow his analyses of stocks and futures, including those requested by you. May 19-26, 2012, Macau Pacific Traders Camp You are cordially invited to an event that occurs only once every two years a Traders Camp in Asia Pacific. Join Dr Elder for an intensive course that will help you become a more disciplined

5 and successful trader. He ll be assisted by a guest instructor Colin Nicholson, former President of Australia Technical Analysts Association. Learn to organize all aspects of your trading, from stock selection through record-keeping. Make trading plans for stocks, futures, and forex. Our Traders Camp will help you achieve competence in these essential areas: Trading Psychology Technical Analysis Money Management & Risk Control Organization & Record-Keeping Decision-Making Tree In addition to the core program, Dr. Elder will teach international trading, futures trading, and day-trading (with the possibility of live trading). We strictly limit the number of traders in our Camp to make sure you receive individual attention. Please bring your trading questions you ll receive serious answers! Please visit the Camp page on our website, explore the links, and write to us at info@elder.com for an application form. Elder-disk for TC2000 v12 This is a huge leap forward for our popular elder-disk for TC2000. Taking advantage of the new programming functionality of TCv12, our programmer has loaded this elder-disk with valuable features, which until now existed only for TradeStation and other high-end programs. This new elder-disk for TC v12 adds a unique Autoenvelope that will put a proper envelope on any chart from a cheap stock to the Dow, in any timeframe. You will never have to fiddle adjusting your envelopes again. It also adds the Impulse system, a unique censorship system for serious traders, described above. In April 2012 we will add MACD XOver, allowing to forecast exactly at what price level the Impulse system will change its color, giving a trading signal. Other features include the Triple Screen, Elder-ray, SafeZone stops, and several scans, such as Triple Screen and Fallen Angels. With all these new features, the price of elder-disk will rise to $199 on May 1. Until then you can get all these features at the current discounted price of $169. TC v12 now provides a convenient Club interface that allows our charts and scans to be directly loaded into your account (no disk to ship). You MUST be a registered TC user to use this elder-disk. Please use the same first name, last name, and address you used to register for TC. If you are not yet a registered TC user, go to this LINK and click on the red button to join TC. Your new elder-disk will be activated within one business day.

6 SPECIAL OFFER - if you had bought an earlier version of an elder-disk for TC from us (before v12), please us, and we will invoice you for only $25 for an upgrade to this latest version. Finally, if you already purchased an elder-disk for TC2000 v12, simply open your TC, click on the Elder-disk icon on the left and then, under Workspaces, click on the Elder-disk again. You will receive an upgraded version at no charge. Special Offer Video Sale Master Class with Dr Elder: Rules, Risks and Rewards Enjoy a full day in class with Dr Elder, as he reviews Mind, Method and Money of successful trading and plans upcoming trades with class participants. This is our newest and latest recording, filmed in April 2010, just as the first major rally of this bull market as running into a top. Looks a little familiar to these days, doesn t it? This 2-hour video sells for $158. Super-special - $99 until May 1 (no exceptions). Best wishes for successful trading from all of us at elder.com Dr. Alexander Elder & staff