Bulls Power


Price movement heavily depends on bears and bulls opposition. Bulls Power Indicator provides an opportunity to predict the possibility of trend change due to bull power assessment. The indicator was developed by alexander Elder; it was described in detail in his book "How to play and win at a stock exchange".

Bulls Power is based on the difference between the maximum and 13-period exponential moving average (H - EMA). As a rule, the indicator is used in combination with a moving average or with any other trend indicator. In case of a downward movement a sell signal is produced; Bulls Power is below zero level at that moment. It is important to have a divergence of peaks in the chart in this case.

Indicator calculation technique

Exponential moving average is to be calculated the first (it is best if it is a 13-period EMA).
BU = H - EMA
BU is bulls power;
EMA is exponential moving average;
H is the highest price of the current bar.

H will be above EMA in case of a downward trend, and bulls power is above zero line, hence the histogram is located above zero line; in case of a downward trend the situation will be opposite.