Low is the lowest point of the shadow, which corresponds to the lowest price of the candle. High indicates the highest price and is located at the highest point of the shadow. The very fact of the first condition indicates that the strength of buyers is fading, and the price may fall.
- Most often, both indicators are placed on the chart at the same time, as they confirm each other’s signals and the signals generated by trend indicators.
- MetaTrader 4 offers vertical lines corresponding to each candlestick.
- The bulls power and bears power indicators are flexible to differing market conditions, thus can be used as part of a forex trend trading strategy and forex range trading strategy.
- All 3 indicators form a kind of basis for a trading strategy.
- When analyzing bull-bear power factors, it is also worth considering that their zero value means that market forces are balanced between the interests of buyers and sellers.
If the price continues to rise due to the momentum in the market, it is a divergence – a reinforcing signal confirming the imminent reversal to the downside. The Bears Power indicator (BE) shows the gradual decline of the sellers’ strength. The buy signal is weak, there could be a probability of a loss.
- Emma, a trader, was having difficulty finding entry points in volatile markets.
- However, when looking for trading signals, it is more convenient to use bars that coincide with the candlestick height.
- The bull-bear power indicators are quite effective and understandable for traders.
- Your actual trading may result in losses as no trading system is guaranteed.
- All in all, the Bulls/Bears Power indicator allows seeing the forces that are driving the market and suggest a simple but efficient basis for a trading strategy.
Bull and bear power indicators are oscillator-type indicators that measure bears’ and bulls’ strength in the market. In general, they show buyers’ and sellers’ strength in certain periods, confirming the signals from trend indicators. This data is insufficient to build a trading strategy.
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I opened a trade on the second green candlestick (blue arrow). The first target is located in the middle of the channel (the first blue line). Here you can close half of the position and protect the remaining 50% with a trailing stop order or place a take-profit order at this level. You can determine a stop-loss and trailing stop levels depending on your risk management. The second target is at the channel’s opposite boundary. The strategy implies capturing the moment of channel narrowing after its expansion.
Data structure
Equally important is the slope of the EMA, as the direction indicates the general trend. 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. Traders commonly follow the slope of a moving average.
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If you are a trader who uses oscillators and would like insight as to how the market might be about to shift, then this could be useful to you. However, it is necessary to choose different EMA values for each market and asset. In addition, the accuracy of indicator signals depends on the selected time frame and market volatility. The difference lies in the calculation formula and in what the indicators display.
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It allows for choosing the type of price used for the calculation. It is also possible to change the moving average settings and style by making a line thickness and color convenient for the user. Setting price levels is especially helpful when a trader needs to study the history of the strongest trend movements. On the MetaTrader4 platform, the bull & bear indicator is displayed as vertical lines, with each line corresponding to a specific candlestick. Divergences between bull power indicator and prices indicate the best trading opportunities. This indicator is used together with a trend indicator (mostly Moving Average).
In 24 hours, the trade generated more than 2.5 USD in a strong uptrend. The arrow indicates the candlestick where the trade was opened. There are some very specific conditions you need to look for when using the Elder-ray in making buying/selling and shorting/covering decisions. By following these tips, you can maximize the effectiveness of the Bull Bear Power Indicator. Always be cautious and use multiple indicators before executing any trades. Dr. Alexander Elder created it as a modification of the Moving Average Convergence Divergence.
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Bulls Power and Bears Power indicators are displayed differently on the MT4 and LiteFinance trading terminals. On the LiteFinance platform, they are full-body bars overlapping each other. MetaTrader 4 offers vertical lines corresponding to each candlestick. If the Bears Power indicator (Low – EMA) is below zero, it means sellers were able to drive price below the EMA. If the Bears Power indicator is above zero, it means buyers were able to keep the lowest price above the EMA.
Analyze the indicator’s trend to identify potential buying or selling. Any information contained in this site’s articles is based on the authors’ personal opinion. These articles shall not be treated as a trading advice or call to action.
The usual course of action is to trade in the direction Bull bear power of the EMA. The high of the consensus of value occurs when bulls cannot lift prices any higher. The low represents the lowest value to which the bears are capable of pushing the price.
Both histograms are located below the price chart. By measuring the distance from the high price of the day to the EMA, bull power represents the capacity of bulls to push prices above the average price. Bull power rises when bulls are stronger and falls when they are weaker. All information shown on this page is for illustrative purposes only and should not be construed as investment, financial, market or other advice. Learn to implement the Bull and Bear power indicator in your trades with a free TradingMoon demo account.
