Bulls Power Technical Analysis and Bulls Power Trading Signals

Created by Alexander Elder

Bulls Power is used to measure the power of the Bulls (Buyers). Bulls Power estimates the balance of power between the bulls & bears.

This indicator aims at identifying if a bullish trend will continue or if the crude price has reached a point where it might reverse.

Calculation

A Price bar has 4 parameters: the Opening, Closing, High and Low of the crude price bar.

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

The highest crude price will indicate the maximum power of the Bulls within a price period.

The lowest crude price will indicate the maximum power of the Bears within a price period.

This Indicator uses the High of the crude price and a Moving Average (Exponential Moving Average)

The moving Average represents the middle ground between sellers and buyers for a certain crude price period.

Therefore:

Bulls Power = High Price - EMA

Bulls Power

Crude Oil Technical Analysis and How to Generate Trade Signals

Buy Signal

A buy oil signal is generated when the 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 & Histogram is located above the zero-line.

Exit Signal

If the HIGH falls under EMA then it means that crude price are starting to fall, the Bulls Power histogram dropfallsdrops below the zero-line.

The Triple Screen method for this indicator suggests identifying the crude price crude trend on a higher chart 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 direction of the long term oil trend in the higher time frame.