Индикатор Форекс Bulls

For oscillators that can generate buy and sell signals, consider adding Bulls Power and Bears Power indicators to your Forex charts.

While these are two different indicators, they work the same way, and usually are used in tandem.

What are the Bulls Power and Bear Power indicators?

These indicators are the work of Alexander Elder, and are described quite well by their names. The Bulls Power indicator is telling you how strong the bulls are (the buyers). The Bears Power indicator is telling you how strong the bears are (the sellers).

Sometimes, they are also referred to as "Elder Ray indicators." Elder himself apparently coined this name, and was inspired by the idea of a "X-ray" for the markets.

How are the Bulls Power and Bear Power indicators calculated?

The calculations for the Bulls Power indicator and the Bears Power indicator are pretty straightforward.

While one might hypothetically use any exponential moving average, most commonly, one uses the day EMA, as suggested by Elder when he came up with these indicators.

As always, you do not need to concern yourself with running these calculations manually since your trading platform will take care of it for you.

What do the Bulls Power and Bears Power indicators show us?

What we are looking at with the Bulls Power and Bears Power indicators is the distance between the EMA and the high/low. This corresponds with the influence of the bulls/bears to continue to push price past the EMA.

You will notice on your charts that the Bulls and Bears Power indicators can both display negative or positive values.

Note that positive values in the Bulls Power indicator indicate bullish strength, while negative values in the Bears Power indicator indicate bearish strength.

How to plot the Bulls Power and Bear Power indicators on your charts?

Here are the steps to plot the Bulls Power indicator and Bears Power indicator on your MT4 Forex charts.

1. First, you need to plot the moving average on your chart since you need to look at it while planning trades. Click on Insert, then Indicators, then Trend, then Moving Average. In the Method dropdown, click on Exponential. Then set the period to Apply to Close. Choose whatever color you like, and add the EMA to your chart by clicking OK.
2. Add the Bulls Power indicator to your chart. To do this, click on Insert, Indicators, Oscillators, then Bulls Power. We recommend that you change the color of the Bulls indicator to green in order to make it readily visually identifiable.
3. Add the Bears Power indicator to your chart. To do this, click on Insert, Indicators, Oscillators, then Bears Power. We recommend that you change the color of the Bears indicator to red in order to make it stand out from the Bulls indicator.

That's all there is to it. You are now ready to look for setups using the Bulls Power indicator and the Bears Power indicator.

How to use the Bulls Power and Bear Power indicators while you trade?

Elder not only created this set of indicators, but he also proposed a method for trading with them. Here are his rules for buying and selling.

Buy when:

• The EMA is rising.
• Bears Power is negative but moving closer to 0.

While those are the only two required conditions, the following conditions suggest an even more ideal setup:

• The more recent histogram peak for Bulls Power is higher than the one before.
• There is bullish divergence between the Bears Power histogram and price.

Sell when:

• The EMA is falling.
• Bulls Power is positive but moving toward 0.

These optional criteria make for an even better setup:

• The most recent histogram low for Bears Power is lower than the one proceeding.
• There is bearish divergence between the Bulls Power histogram and price.

General tips for using the Bulls Power and Bear Power indicators

• Use all system components together. Elder created the bulls and Bears Power indicators to be used together along with the day EMA. They were not intended to function as standalone individual indicators.
• Test before going live. Before you use this system to trade with real money, make sure you backtest and demo test. Once you know you have the potential to be profitable, you can risk real money.
• Modify the system if you want, but again, test. You do not necessarily need to use Elder's system exactly as he engineered it. But if you are going to make any changes, do not forget to test them first.

Conclusion: The Bulls Power and Bear Power Indicators

Now you know how you can use the Bulls Power indicator, Bears Power indicator, and day EMA together to generate buy and sell setups for Forex trading. While Elder's method may seem complex at first, it is relatively straightforward once you see it in action.

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&#;Bulls and Bears

In the currency market, there is a constant struggle between the buyers &#; &#;bulls&#; who raise prices and the sellers &#; &#;bears&#; who lower prices. At the end of the trading day the price of the asset becomes lower or higher than on the previous trading day. If it is higher, the &#;bulls&#; have taken the initiative and prices will rise; if it is lower, the &#;bears&#; have managed to impose their terms on the market and prices will fall.

But is it possible to determine when the market begins to be dominated by buyers or sellers? To solve this problem, one of the most famous and respected traders in the world, Alexander Elder created two oscillator for forex (Fig. 1): Bears Power, reflecting the superiority of the Bears, and Bulls Power, showing the dominance of the Bulls:

Image. 1

In the trading terminal, they are placed at the bottom of the price chart as histograms. These indicators are quite popular, they are considered classic tools for forex trading.

Enter the broker&#;s terminal, add the Bulls Power and Bears Power oscillators to the chart and see what comes out

Description of the Bears Power oscillator

The situation when the balance of power in the market is in favor of the bears is determined by the Bears Power oscillator. It is based on Alexander Elder&#;s assumption that moving average shows the balance between &#;bulls&#; and &#;bears&#; for a certain period of time, and the minimum price shows the strength of the &#;bears&#;. The author suggested to take a period of 13 days as a basis. As a result, the formula for calculating the tool looks like this:

PB = LOW &#; EMAwhere:

• PB is the power of the Bears;
• EMA &#; exponential moving average, fair price in the calculation period;
• LOW &#; the minimum price of the current bar.

In the exponential moving average, prices at the end of the period have the most noticeable influence on the oscillator indicators, which allows us to evaluate Bears Power quite correctly. If the values of this forex indicator below zero, price lows below the EMA, it shows the growing strength of the &#;bears&#;, if higher, price lows above the EMA, then the &#;bears&#; give up positions, trend The zero mark represents an &#;equilibrium&#; situation between buyers and sellers. The zero mark represents a &#;parity&#; situation, an equilibrium between buyers and sellers.

The most positive signal for the bears is when in a downtrend, the next lowest oscillator reading is lower than the previous reading and coincides with the price movement. This can indicate that the bears have gained a lot of strength and will continue to push the price to make new lows. If price has updated the low, but the next oscillator low is higher than the previous one on the histogram, it may indicate that the bears are weakening and we should expect a trend reversal soon.

The Bears Power oscillator itself is designed to determine Forex signals only to buy the asset. The Bears Power indicator is rarely used in trading without other indicators, because with all its merits it does not show the sellers&#; strength with one hundred percent accuracy. In particular, volume is not considered in calculations, which does not give a complete picture of the market situation, so it would be imprudent to use the Bears Power signals in trading decisions. It is more useful as an indicator showing the most probable trend direction. The Bears Power oscillator is most frequently used with trend indicators, mainly with a moving average of some type.

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Bulls Power oscillator description

The Bulls Power indicator mirrors the Bears Power. It is determined by the formula:

PB = HIGH &#; EMA, where:

• PB is the power of the bulls;
• EMA &#; exponential moving average, fair price in the calculation period;
• HIGH &#; the maximum price of the current bar.

On an uptrend HIGH is above the EMA, the oscillator readings are above zero line, it shows the growth of &#;bulls&#; power&#;. If on the downtrend HIGH is placed below the EMA, the oscillator indicators are below the zero line, it indicates the weakening of the &#;bulls&#; strength&#;, which gives the &#;bears&#; an opportunity to intercept the initiative.

Bulls Power is used to analyze the market situation in order to determine the moment of the beginning of a trend. But the Bulls Power signals are aimed only at selling the asset. Like the Bears Power, the Bulls Power oscillator should preferably be used with trend indicators. Of course, often both oscillators of power are used together, because they were invented as complementary.

The Bull Power and Bear Power oscillators are included in the list of standard in the trading terminals. In MT5 they are placed in the navigation panel on the left side of the price chart (Fig. 2). In the indicator settings you can change the period:

Image. 2

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Trading strategies based on Bull Power and Bear Power

Bull Power and Bear Power oscillators are used in Forex strategies to determine entry and exit points in situations of &#;price overshoot&#;, i.e. &#;price overshoot&#;, when the price is very far from the average values (over the scale).

For example, Bear Power is used on an uptrend to track the moment of maximum dominance of &#;bears&#; in order to enter the market on the rise in price. Also, these oscillators are used to determine the exit points from the market, and the position selection on an uptrend is made with Bulls Power, and on a downtrend &#; with Bears Power.

Bears Power and Bulls Power oscillators are most often used together with trend indicators, such as exponential moving average, EMA (Fig. 3), which is needed to determine the direction of the trend:

Image. 3

On the downtrend, which is shown by the EMA, the Bulls Power oscillator shows a sell signal when the Bulls Power indicators are above the zero mark, but begin to decline. Also, the Bulls Power oscillator data does not confirm this trend and shows that the trend can change to a downtrend, while the Bulls Power oscillator data does not confirm this trend and shows that it can change to a downtrend. At the same time, a sell position is opened when the Bulls Power readings are below zero.

For example, to implement this strategy, an exponential moving average with a period of 34 is set, while a period of 68 is specified for Bears Power, and a period of for Bulls Power. The EMA crossing the price from bottom to top will be a signal to buy, the Bears Power histogram indicators must be below zero level, but must show growth. The signal for selling will be the EMA crossing by the price from upside down, the Bulls Power oscillator readings should be above the zero level, but tends to decrease.

The strategy using divergence is built on the divergence of price and indicators Bulls Power and Bears Power, although it is a rare signal, but the more informative it is. In a bullish divergence the indicators on the Bears Power oscillator are placed below the zero mark, but are growing, while the price continues to decrease. A divergence indicates an uptrend can be expected. In a bearish divergence, the Bulls Power indicator readings are above the zero level, but are declining while the price is rising. The divergence shows that we can expect a trend reversal to a downtrend soon.

Despite the fact that it is not recommended to implement strategies only with the considered oscillators without additional indicators, there is a trading strategy, which uses only Bears Power and Bulls Power. For example, if the Bulls Power indicators in the histogram begin to decrease and the Bears Power bars increase, it can be a signal to sell. If the Bulls Power figures increase and the Bears Power figures decrease, it can be a signal to buy. But more often in strategies with the Bears Power and Bulls Power oscillators are used indicators Stochastic, RSI, MACD, ATR, Bollinger Bands.

Bears Power and Bulls Power oscillators are also used with Bill Williams indicators, in particular, in the Accelerator Oscillator strategy. In this strategy, the Elder indicators are used as the main ones, and the Accelerator Oscillator is used as a signal filter (Figure 4):

Image. 4

This strategy is applied on timeframe from M30, all indicators are set with standard values. Sell positions are set when the Bulls Power indicators are above zero and tend to weaken, cross the zero level below zero, and the Accelerator indicator is colored red, placed below zero or equal to zero.

Buy positions are established when the Bears Power is placed below the zero mark, you should wait when its indicators cross the line to the mark above zero, the Accelerator indicator should be colored green and placed above or on the zero mark.

In the other strategy together with Bulls Power and Bears Power indicators are used Momentum and Elder Impulse System with standard settings. Recall that Momentum is a trend indicator, which is included in the list of standard tools of trading terminals, it measures the magnitude of price change over a certain period of time.

The Elder Impulse System is basically a trading system consisting of EMA and MACD: the EMA is used to determine the trend and the MACD shows the momentum. This indicator can be downloaded for example here eunic-brussels.eu

Buy positions are opened when Momentum crosses the level from below, the Elder Impulse System indicator is colored green, and the Bulls Power oscillator indicators are not only above the zero level, but also continue to grow. The opening of a sell position implies a downward crossover of the Momentum indicator level, the Elder Impulse System should turn red, the Bears Power indicators are placed below the zero level and continue to fall:

Image. 5

Another fairly popular strategy, which, for example, with Bears Power applies Parabolic SAR (Fig. 5). In this case the signals are generated by Parabolic, the points of which are placed on any side candles on the chart: if the point is above the candle, it is a sell signal, if the point is below the candle, it is a buy signal. Bears Power confirms the Parabolic signal under a candlestick.

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Conclusions

Bulls Power and Bears Power oscillators have such advantages as a fairly realistic display of the market situation, ease of use and interpretation of signals, the ability to predict future developments, versatility.

In general, these are quite effective indicators for trading. Their main disadvantage is that it is not recommended to use these indicators without other market instruments. If used together, Bulls Power and Bears Power can be the basis of many effective strategies.

Everyday trading represents a battle of buyers ("Bulls") pushing prices up and sellers ("Bears") pushing prices down. Depending on what party scores off, the day will end with a price that is higher or lower than that of the previous day. Intermediate results, first of all the highest and lowest price, allow to judge about how the battle was developing during the day.

It is very important to be able to estimate the Bulls Power balance since changes in this balance initially signalize about possible trend reversal. This task can be solved using the Bulls Power oscillator developed by Alexander Elder and and described in his book titled Trading for a Living. Elder based on the following premises when deducing this oscillator:

• moving average is a price agreement between sellers and buyers for a certain period of time,
• the highest price displays the maximum buyers' power within the day.

On these premises, Elder developed Bulls Power as the difference between the highest price and period exponential moving average (HIGH - EMA).

Application

This indicator is better to use together with a trand indicator (most frequently Moving Average):

• if trend indicator is down-directed and the Bulls Power index is above zero, but falling, it is a signal to sell;
• it is desirable that, in this case, the divergence of peaks were being formed in the indicator chart.

Calculation

The first stage of this indicator calculation is calculation of the exponential moving average (as a rule, it is recommended to use the period EMA).

BULLS = HIGH - EMA

Where:
BULLS &#; Bulls Power;
HIGH &#; the highest price of the current bar;
EMA &#; exponential moving average..

In the up-trend, HIGH is higher than EMA, so the Bulls Power is above zero and histogram is located above zero line. If HIGH falls under EMA when prices fall, the Bulls Power becomes below zero and its histogram falls under zero line.