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EABuilder Pro

Bulls Power

Understanding Bulls Power

Section titled “Understanding Bulls Power”

Everyday trading involves buyers (Bulls) and sellers (Bears) pushing prices up or down. The outcome of this battle determines whether the day ends with a higher or lower price than the previous day. By analyzing intermediate results, such as the highest and lowest price, we can assess how the battle unfolded throughout the day.

Estimating Bulls Power

Section titled “Estimating Bulls Power”

It is crucial to be able to gauge the balance of Bulls Power as it can indicate potential trend reversals. Alexander Elder developed the Bulls Power oscillator based on the premise that the difference between the highest price and a 13-period exponential moving average (HIGH - EMA) can provide insights into this balance.

Using Bulls Power with Trend Indicators

Section titled “Using Bulls Power with Trend Indicators”

To enhance its effectiveness, it is recommended to use the Bulls Power indicator in conjunction with a trend indicator, such as a Moving Average.

Bulls Power stays positive while the highs are above the 13-period EMA.

Calculation of Bulls Power

Section titled “Calculation of Bulls Power”
BULLS = HIGH - EMA(CLOSE, 13)

Where:

  • HIGH is the highest 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 positive value means the high is above the moving average and the Bulls are in control. A value that falls towards zero while still positive shows that the Bulls are getting weaker.