Bulls Power Indices Technical Analysis & Bulls Power Trading Signals
Created by Alexander Elder
Bulls Power indicator is used to determine power of the Bulls (Buyers). Bulls Power measures the balance of power between the bulls & bears.
This indicator aims at identifying if a bullish trend will continue or if the price has reached a point where it might reverse.
Calculation
A Price bar has four parameters: the Opening, Closing, High & Low of the price bar.
Each Price bar either closes higher or lower than previous trading price bar.
The highest price will show the maximum power of the Bulls within a price period.
The lowest price will show the maximum power of the Bears within a price period.
This Technical Indicator uses the High of the price & a MA (Exponential MA)
The moving Average represents the middle ground between sellers & buyers for a certain price period.
Therefore:
Bulls Power = High Price - Exponential Moving Average
Bulls Power
Technical Analysis & How to Generate Signals
Buy Signal
A buy trade signal is generated when the Bulls Power oscillator indicator moves above Zero.
In an up-trend, the HIGH is higher than Exponential Moving Average, so the Bulls Power is above zero & Oscillator is located above zero-line.
Exit Signal
If the HIGH falls under EMA then it means that price are starting to fall, the Bulls Power histogram drops below the zero-line.
The Triple Screen method for this technical indicator suggests identifying the price trend on a higher chart time frame interval (like daily time frame) and applying the bulls powers on a lower chart interval (like hourly chart time frame). Signals are traded and transacted according to the indicator but only in direction of the long term trend in the higher time frame.
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