Bulls Power Analysis and Bulls Power Trading Signals

Developed by Alexander Elder

Bulls Power is used to gauge the 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 price has reached a point where it might reverse.

Calculation

A Price bar has four parameters: the Opening, Closing, High & Low of the price bar.

Each Price bar either closes higher or lower than previous price bar.

The 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 Moving Average (Exponential MA)

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

XAUUSD Analysis and Generating Signals

Buy Signal

A buy trading signal gets generated when Bulls Power oscillator moves 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 Trade 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 interval (like daily time frame) and applying the bulls power on a lower chart interval (like hourly chart time-frame). Signals are traded according to the indicator but only in the direction of the long term trend in the higher time frame.