Bulls Power Trading Technical Analysis and Bulls Power Indicator Signals
Developed by Alexander Elder
Bulls Power is used to measure power of the Bulls (Buyers). Bulls Power measures the balance of power between the bulls & bears.
This indicator tries to spotting if a bullish trend will continue or if the 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 lower than previous bar.
Highest price will show the maximum power of the Bulls within a price period.
The lowest price will show the maximum power of the Bears within a price period.
This Indicator uses the High of the price and a MA (Exponential Moving Average)
The moving Average represents the middle ground between sellers & buyers for a certain price period.
Therefore:
Bulls Power = High Price - Exponential MA
Bulls Power
Forex Technical Analysis and How to Generate Signals
Buy Signal
A buy signal is generated when Bulls Power oscillator moves above Zero.
In an upward market trend, the HIGH is higher than EMA, so the Bulls Power is above zero & Histogram Oscillator is located above zeroline.
Exit Signal
If the HIGH falls under EMA then it means that prices are beginning to drop, the Bulls Power histogram dropfallsdrops below zeroline.
The Triple Screen technique for this indicator suggests spotting the price trend on a higher chart timeframe interval (like daily time frame) and applying the bulls power on a lower chart timeframe interval (like hourly time frame). Signals are traded according to the indicator but only in the direction of the long term trend in the higher time frame.
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