Bulls Power Commodity Trading Technical Analysis & Bulls Power Trading Signals
Created by Alexander Elder
Bulls Power is used to estimate power of the Bulls (Buyers). Bulls Power estimates the balance of power between the bulls & bears.
This commodity technical indicator aims at identifying if a bullish commodity trend will continue or if the commodity price has reached a point where it may reverse.
Calculation
A Commodity Trading Price bar has 4 parameters: Opening, Closing, High & Low of the commodity price bar.
Each Commodity Trading Price bar either closes higher or lower than the previous commodity price bar.
The highest commodity price will indicate the maximum power of the Bulls within a commodity price period.
The lowest commodity price will indicate the maximum power of the Bears within a commodity price period.
This Indicator uses the High of the commodity price & a Moving Average (Exponential)
The moving Average represents the middle ground between sellers and buyers for a certain commodity price period.
Therefore:
Bulls Power = High Commodity Trading Price - Exponential Moving Average
Bulls Power
Commodity Analysis & Generating Trading Signals
Buy Trading Signal
A buy signal is generated when Bulls Power oscillator moves above Zero.
In an up commodities trend, the HIGH is higher than Exponential Moving Average, so the Bulls Power is above zero and Histogram/Oscillator is located above zero line.
Exit Trading Signal
If the HIGH falls under Exponential Moving Average then it means that commodity price are starting to fall, the Bulls Power histogram fall below the zero line.
The Triple Screen method for this indicator suggests identifying the commodity price trend on a higher chart interval (like daily time frame) and applying the bulls power on a lower chart interval (like hourly time frame). Signals are traded according to the indicator but only in the direction of the long term commodity trend in the higher time frame.
