Bulls Power Indices Technical Analysis & Bulls Power Trading Signals

Developed by Alexander Elder

Bulls Power is used to estimate the 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 may 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 trading price will show the maximum power of the Bulls within a trading price period.

The lowest trading price will show the maximum power of the Bears within a trading price period.

This Technical Indicator uses the High of the price & a MA (Exponential MA)

The moving Average represents the middle ground between sellers and buyers for a certain price period.

Therefore:

Bulls Power = High Price - Exponential Moving Average

Bulls Power

Technical Analysis and How to Generate Signals

Buy Trade Signal

A buy signal gets generated when the Bulls Power oscillator moves above Zero.

In an up trend, the HIGH is higher than Exponential MA, so the Bulls Power is above zero & Oscillator is located above the zero-line.

Exit Trade Signal

If the HIGH falls under EMA then it means that trading price are starting to fall, the Bulls Power histogram drops below the zero-line.

The Triple Screen method for this indicator suggests identifying the price trend on a higher chart interval (like daily time frame) and applying the bulls power on a lower chart interval (like hourly chart time-frame). Signals are traded according to the indicator but only in direction of the long term trend in the higher time frame.