Bulls Power Technical Indicator Analysis and Bulls Power Trading Indicator 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 and bears.
This indicator aims at identifying if a bullish trend will continue or if the trading price has reached a point where it may reverse.
Calculation
A Currency Price bar has four parameters: the Opening, Closing, High and Low of the price bar.
Every Price bar either closes higher or closes lower than previous bar.
The highest price will mark & show the max power of the Bulls within a price period.
The lowest price will mark and show the max power of the Bears within a price period.
This Indicator uses the High of the price & a MA (Exponential Moving Average)
The moving Average illustrates the middle ground between sellers and buyers for a certain price period.
Hence:
Bulls Power = High Price - EMA
Bulls Power
Technical Analysis & How to Generate Signals
Buy Trading Signal
A buy trade signal gets generated when Bulls Power oscillator technical indicator moves above Zero.
In an upward market trend, the HIGH is higher than EMA, so the Bulls Power is above zero and Histogram is located above zeroline.
Exit Signal
If the HIGH falls under Exponential MA then it means that prices are beginning to drop, the Bulls Power histogram falls below zeroline.
The Triple Screen technique for this indicator suggests spotting the price trend on a higher chart time frame interval (like daily time frame) and applying the bulls power on a lower chart time frame interval (like hourly time frame). Signals are traded according to the trading indicator but only in direction of the long term trend on the higher chart time=frame.
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