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