These articles shall not be treated as a trading advice or call to action. The authors of the articles or RoboForex company shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein. What was the price of gold (XAU/USD) and what are the forecasts for gold in 2024? After the signal forms, place a pending buy order (or enter by the market) a bit higher than the high of the last two candlesticks. Dr. Alexander Elder created it as a modification of the Moving Average Convergence Divergence.

The indicators are based on the 13-period exponential moving average as recommended by Dr. Alexander Elder. If the buyers’ power grows, the sellers’ power should fall accordingly. In this case, Bulls Power goes to its maximums, and Bears Power, on the contrary, tends to the zero line.

Disadvantages of the Bears and Bulls Power Indicator

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. Divergence occurs when the trend of the price and the histogram are moving in opposite directions. In the chart above, the histogram is clearly showing us that the bears are seriously undermining the bulls, but the price still seems to be going up.

Death cross pattern in trading

On these premises, Elder developed Bulls Power as the difference between the highest price and 13-period exponential moving average (HIGH – EMA). 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.

Calculation of the Bears and Bulls Power Indicator

Bears Power will go lower in the negative zone, Bulls Power will move to the zero line. 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. In addition to the EMA, you can set a simple moving average (MA), as well as linearly weighted (LWMA) and smoothed (SMMA) moving averages.

Bear Power indicator in Crypto

An interesting piece of history surrounding the Bull Bear Power Indicator is that it was first presented by Alexander Elder in the 1980s. He was an author and trader with a revolutionary approach to technical analysis. His work changed the way traders view market strength and the indicator has become a staple for many. Let’s take the GBP/USD currency pair on the H1 time frame. Since it is necessary to reduce the scale of the chart in order to find divergences, higher time frames are out of consideration. The strategy implies capturing the moment of channel narrowing after its expansion.

Signals Summary

• So bulls and bears are not only a representation of two opposing approaches to working in the financial markets.
• The exponential MA differs from the simple moving one in that the formula gives more weight to later periods with the help of coefficients.
• If the indicator hovers near the zero line, there is balance in the market – neither party prevails, demand is balanced with supply, and the price does not change.
• If the yellow line on the chart crosses the blue one and continues to move upward, it is worth buying assets.
• The Bears Power indicator (BE) shows the gradual decline of the sellers’ strength.

And vice versa, if the histogram is declining, dropping below zero, this indicates the predominance of bears. The Elder-Ray index is called the Bull Bear Power indicator. It reflects the behavior of buyers and sellers in the market during a certain period of time. If the indicator hovers near the zero line, there is balance in the market – neither party prevails, demand is balanced with supply, and the price does not change.

Get the latest Ford Motor Company stock forecast for 2024. There are some very specific conditions you need to look for when using the Elder-ray in making buying/selling and shorting/covering decisions. Visually, it is convenient to draw divergence lines at a minimum scale.

AUD/USD: Analysis of the Current Trend and Expert Forecasts for 2024

It shows trend phenomena and is especially effective in divergence trading when a trade is opened in the direction of the indicator’s movement. One of the signals of an upcoming trend change is a reversal of the balance in the market. It shows the buyers’ and sellers’ trader market behavior over a certain period. If the Elder-Ray Index fluctuates around the zero line, it points to a certain equilibrium in the market, which means a balance between supply and demand.

• In turn, bearishness means the price will decline because supply exceeds demand.
• However, you may pre-empt the reversal of a trend quite early through divergence.
• By estimating the relative strength of bulls against bears, the bull power indicator provides traders with ideal entry or exit points.

GBP/USD Daily Price Forecast – 15th September 2025

While it might seem confusing to use two different indicators, traders can download a combined and we have it prepared for you at the bottom of this page. When applied to the chart, this compact indicator plots the bulls and bears power as a histogram oscillator as shown in the next chart below. The bear-bull power indicator is located in the oscillator block on the MetaTrader 4 platform. Its based on a 13-period exponential moving average recommended by Dr. Alexander Elder. Divergences between bear power indicator and prices indicate the best trading opportunities. If trend indicator is up-directed and the Bears Power index is below zero, but growing, it is a signal to buy.

Clients using STP accounts are advised to transition their trading activity and withdraw any remaining funds before this date to avoid disruptions. If the yellow line on the chart crosses the blue one and continues to move upward, it is worth buying assets. If the yellow line crosses the blue one in a downward direction, a more profitable step would be to sell. Read the latest foreign currency trading forecast for 2024. Find out how the EUR/USD, GBP/USD, USD/JPY, and other currency pairs could change in 2024.

According to the Elder-Ray index, bulls’ strength is the difference between the maximum price and the exponential moving average. A value greater than zero Bull bear power indicates that the price is rising. A value less than zero signals that the market is dominated by sellers, which means prices may decline. By separately analyzing the buying and selling pressure, the indicator offers a comprehensive view of the market sentiment, allowing traders to gauge the dominance of bears or bulls.