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trading:bulls-bears-power

Bulls/Bears Power

This indicator is developed by Dr. Alexander Elder and is called also the Elder-Rays. The primary principles on which Elder based the oscillator are the following:

  • The highest price displays the maximum buyer’s power within the day.
  • The lowest price displays the maximum seller’s power within the day.
  • The moving average can be construed as a price agreement between buyers and sellers for a given time period.

Bull Power is calculated by subtracting the 13-periods EMA from the High price.

Bear Power is calculated by subtracting the 13-periods EMA from the Low price.

According to Dr. Elder, this indicator generates the following trading signals:

Buying Conditions:

Essential

1. Prices are trending upwards according to the 13-periods exponential moving average

2. Bear Power is negative, but rising

Optional

3. The latest Bull Power peak is higher than its previous peak

4. Bear Power is rising from a bullish divergence

Selling Conditions:

Essential

1. Prices are trending downwards according to the 13-periods exponential moving average

2. Bull Power is positive, but declining

Optional

3. The latest Bear Power trough is lower than its previous trough

4. Bull Power is declining from a bearish divergence