Learn to implement the Bull and Bear power indicator in your trades with a free TradingMoon demo account. Both indicators are an auxiliary tool for finding and confirming trends. Like other indicators, Bears Power and Bulls Power have their advantages and disadvantages.
- By combining these indicators with other trend-following tools, you can obtain confirmed market signals.
- When Bull Power is positive, it indicates that buyers are in control and the market is likely to rise.
- Bears Power is a fully unbounced oscillator with a base value of 0 and has no lower or upper limit.
1. Concept of Bull Bear Power
In addition to the EMA, you can set a simple moving average (MA), as well as linearly weighted (LWMA) and smoothed (SMMA) moving averages. – Bull power is negative when the high price is below the 13-day EMA. – Bull power is positive when the high price is above the 13-day EMA. – The highest price during the period represents the maximum bullish strength. One of the popular classic Forex strategies is trading using moving averages. This strategy is discussed in general terms in many sources, but it has nuances.
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On the trading platform, Index Bull Bull Bear Power are two different indicators. They are histograms, which are built relative to the middle zero horizontal line. The Bull Bear Power indicator is used as an oscillator and in combination with other signals generated by trend indicators. By measuring the distance from the high price of the day to the EMA, bull power represents the capacity of bulls to push prices above the average price. Bull power rises when bulls are stronger and falls when they are weaker. When used correctly, Bull Bear Power can be a valuable tool in a trader’s arsenal, helping to navigate market trends and manage risk with greater confidence and precision.
The EMA period is selected individually for each time frame, asset, and volatility in the strategy tester. Based on these assumptions, Dr. Alexander Elder developed Bulls Power as the difference between the maximum price and the exponential moving average to confirm the trend. A value greater than zero means that buyers dominate, and the price is going up. A value less than zero means that sellers dominate the market, and the price is declining. In essence, the Bull Bear Power is an invaluable tool in a trader’s arsenal. It offers a unique perspective on market sentiment and can help traders make more informed decisions.
It’s most effective when used in conjunction with other indicators, such as trend or momentum indicators. This combination can provide a more holistic view of the market, enabling traders to make more informed decisions. The decreasing Bull Bear Power indicates weakening of the corresponding market force. A falling indicator in positive territory signifies weakening bulls, while a decreasing indicator in negative territory signifies weakening bears. For instance, when the Bull Power line is rising, it indicates that buyers are in control and it might be a good time to consider buying.
- It combines both the bull power and bear power indicators to assess the strength of these forces in the forex market.
- Conversely, if the indicator is below zero, it suggests that bears are dominating and selling might be a good option.
- Conversely, a negative value signifies that the bears are dominating, with selling pressure surpassing buying pressure.
- This indicator is typically used in conjunction with other technical analysis tools to confirm trends and generate trading signals.
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Bull and bear power indicators are a trend confirming tool in the Forex market. When it comes to implementing Bull Bear Power into your trading strategies, understanding the nuances of this oscillator is key. Developed by Dr. Alexander Elder, the Bull Bear Power indicator measures the strength of buyers (bulls) against sellers (bears) in the market. Its unique ability to gauge market sentiment makes it an invaluable tool for traders. In essence, the Bull Bear Power indicator is a powerful tool for traders who want to understand the balance of power between buyers and sellers in the market. However, it should be used in conjunction with other technical analysis tools for the best results.
Since it is necessary to reduce the scale of the chart in order to find divergences, higher time frames are out of consideration. The Bears Power indicator (BE) shows the gradual decline of the sellers’ strength. There are some very specific conditions you need to look for when using the Elder-ray in making buying/selling and shorting/covering decisions. If the Bears Power indicator (Low – EMA) is below zero, it means sellers were able to drive price below the EMA. If the Bears Power indicator is above zero, it means buyers were able to keep the lowest price above the EMA. Bears Power is a fully unbounced oscillator with a base value of 0 and has no lower or upper limit.
– Compare the bull power and bear power indicators against the 13-day EMA to determine which is more dominant. In the dynamic world of trading, understanding the Bull Bear Power is crucial. This unique indicator, developed by Dr. Alexander Elder, measures the power of bulls and bears in the market, providing valuable insights to traders. It serves as a barometer for market sentiment, helping traders predict potential price movements. Divergences between bull power indicator and prices indicate the best trading opportunities.
Bulls and Bears Power Indicators FAQs
For instance, using it in conjunction with moving averages or trend lines can provide more reliable signals. It’s important to note that the Bull Bear Power Indicator is not a standalone tool. It should be used in conjunction with other technical analysis tools and indicators to confirm signals and reduce the risk of false signals.
This indicator is used together with a trend indicator (mostly Moving Average). If trend indicator is down-directed and the Bulls Power index is above zero, but falling, it is a signal to sell. The Bull Power and Bear Power are the oscillators developed by Dr Alexander Elder.
In addition, the accuracy of indicator signals depends on the selected time frame and market volatility. Let’s have a look at the AUD/USD currency pair on the H4 time frame. The exponential MA differs from the simple moving one in that the formula gives more weight to later periods with the help of coefficients. In the settings, you can also specify the type of price used in the calculation formula and the type of MA. There are eight price variants, four main open-high-low-close (OHLC) prices and four additional ones.
On the other hand, Bear Power can be used to spot potential selling opportunities. A positive Bear Power indicates that sellers are in control, suggesting a potential market decline. However, a negative Bear Power signifies that buyers are dominating, indicating a potential market rise.
It is also plotted on a histogram by subtracting the exponential moving average from the high price level of the currency pair. It indicates a buy signal when the histogram trends above the zero-price line, with the high price level being more than the exponential moving average. Elder Ray Index is a technical indicator especially developed to identify the bull or bear power in the market. It consists of both a bull power indicator and a bear power indicator that help measure the strength of both in the forex market. This EMA line shows the average value of the trending price levels in the bullish or bearish trend. When bulls are more powerful, the prices bull bear power are said to increase, and EMA slopes upwards.
The Bull Bear Power is calculated by subtracting the lowest low from the highest high over a specified period. A positive value indicates that bulls are in control, suggesting a potential uptrend. Conversely, a negative value suggests that bears have the upper hand, indicating a possible downtrend. This simple yet powerful tool can be the key to unlocking successful trades.
Conversely, if the indicator is below zero, it suggests that bears are dominating and selling might be a good option. However, it’s important to note that like any other trading tool, the Bull Bear Power indicator should not be used in isolation. By combining these indicators, the Elder Ray Index helps confirm market signals and identify ideal entry and exit points. It integrates trend-following and oscillating indicators such as the Relative Strength Index (RSI) and Money Flow Index to provide a comprehensive market analysis. This indicator is also plotted on a histogram, by subtracting the EMA from the high price level of the currency pair.
Divergences between bull or bear power and prices indicate the best trading opportunities using the Elder-Ray indicator. Equally important is the slope of the EMA, as the direction indicates the general trend. Bear power is the capacity of bears to push prices below the moving average. The distance between the low and the EMA, which widens when the bears are weaker and narrows when they are stronger, gives this figure. Bear power is typically negative, so if it turns positive, the bulls have taken control. The usual course of action is to trade in the direction of the EMA.
