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EABuilder Pro

Bears Power

Introduction

Section titled “Introduction”

Everyday trading involves buyers (Bulls) pushing prices up and sellers (Bears) pushing prices down. The outcome of this battle determines whether the day ends with a higher or lower price compared to the previous day.

The Bears Power Oscillator

Section titled “The Bears Power Oscillator”

To assess the balance between Bulls and Bears, it is crucial to analyze the Bears Power. This oscillator, developed by Alexander Elder, provides insights into possible trend reversals. It is calculated by finding the difference between the lowest price and a 13-period exponential moving average (LOW - EMA).

Using the Bears Power Oscillator

Section titled “Using the Bears Power Oscillator”

To enhance its effectiveness, it is recommended to combine the Bears Power oscillator with a trend indicator, such as the Moving Average.

Bears Power turns positive during the uptrend because the lows stay above the 13-period EMA.

Calculation of Bears Power

Section titled “Calculation of Bears Power”
BEARS = LOW - EMA(CLOSE, 13)

Where:

  • LOW is the lowest price of the bar;
  • EMA(CLOSE, 13) is the 13-period exponential moving average of the close price (the period can be changed in the indicator settings).

A negative value means the low is below the moving average and the Bears are in control. A value that rises towards zero while still negative shows that the Bears are getting weaker.