- Trading Education
- Advanced
- What Are Bear and Bull Power Indicators?
Advanced
Identify hidden opportunities, master risk management,
and become an expert Forex trader.
Bear and bull power indicators in forex measure the power of bears (sellers) and bulls (buyers) to identify ideal entry points. Whenever the forex market is in a strong uptrend or downtrend, these power indicators can determine a trend’s strength.In our article, we will understand both bear and bull power indicators in detail.
What is bear power indicator?
Bear power indicator can determine the strength of bears or sellers in the market. It indicates whether the current currency pair prices are lower than the previous ones, signalling that bears are in a winning position. By estimating the relative strength of bears against bulls, the bear power indicator provides traders with the ideal entry or exit points.It is plotted on a histogram by subtracting the exponential moving average from the lowest currency pair price. It indicates a sell signal when the histogram trends below the zero level and the low-price level is lower than the exponential moving average. On the other hand, it indicates exit signals when the histogram trends above the zero level and the low price is more than the exponential moving average. The latter indicates increasing prices.
What is bull power indicator?
Bull power indicators indicate the strength of bulls or buyers in the market. The indicator is responsible for determining if the current currency pair prices are higher than the previous ones, indicating that bulls are in a winning position. By estimating the relative strength of bulls against bears, the bull power indicator provides traders with ideal entry or exit points.It is also plotted on a histogram by subtracting the exponential moving average from the high price level of the currency pair. It indicates a buy signal when the histogram trends above the zero-price line, with the high price level being more than the exponential moving average. On the other hand, it indicates a sell signal when the histogram trends below zero and the high price level is lower than the exponential moving average indicating a bearish phase.
How to calculate the bear and bull power indicators
Bear power indicator calculation = Lowest currency pair price – 13-day exponential moving average (EMA) of closing prices.
- The low price level will represent the maximum bearish strength during the time period.
- When we compare the low price level to the EMA, we will get a measure of the general bearish trend strength.
- The bear power will be negative when the low price is below the 13-day EMA.
- The bear power will become positive when the low price is above the 13-day EMA
Bull power indicator calculation = highest currency pair price – 13-day exponential moving. average (EMA) of closing prices.
- The high price level of the currency pair bar will represent the maximum of the bullish strength during the time period.
- Comparing the high price level to the EMA, we get a measure of the general bullish trend strength.
- The bull power is positive when the high price level is more than the 13-day EMA.
- The bull power is negative when the high price level is less than the 13-day EMA.
Elder Ray Index: The most used bear and bull power indicator
Elder Ray Index is a technical indicator especially developed to identify the bull or bear power in the market. It consists of both a bull power indicator and a bear power indicator that help measure the strength of both in the forex market.This EMA line shows the average value of the trending price levels in the bullish or bearish trend. When bulls are more powerful, the prices are said to increase, and EMA slopes upwards. When the bears are more powerful, the prices are said to decrease, and EMA slopes downward.With the bear power indicator, the Elder Ray Index measures how low the market is trending, and with the bull power indicator, it measures how high it is trending. This is done by comparing the bulls and bears to a third measure known as the 13-day EMA, which acts as the value’s baseline.The Elder Ray Index helps in confirming market signals and identifying ideal entry and exit price levels by combining trend-following and oscillating indicators like the Relative Strength Index (RSI), Money Flow Index and more.
How to plot the bear and bull power indicators on the chart?
- First, add the 13-day EMA to the price chart to understand the current market trend movement.
- Next, add the bulls power indicator to the chart by clicking insert – indicators – oscillators – bulls power. The bulls power indicator should be plotted in green colour so that it is easily identifiable.
- Lastly, add the bears power indicator in the same way as above and select the colour red for the same.
- Compare the bulls power indicator and bearish power indicator to the 13-day EMA to determine if the bulls are more powerful or the bears, and place a market order accordingly. If the bulls are more powerful, place a long order and if the bears are more powerful, place a short order.
Trade with the bear and bull power indicators
You can trade with the bear and bull power indicators through the Elder Ray Index strategy discussed above. Combine it with other trend-following indicators to get confirmed market signals. Sign up with Blueberry Markets, a global trading platform, to kickstart your forex trading journey.Sign up for a live trading account or try a risk-free demo account.
Recommended Topics
- Guide to Utilizing a No Stop-loss Trading Strategy in Forex
Stop-loss orders can sometimes make a trade order restrictive, which could eventually lead traders to get out of a trade prematurely due to a false market signal.
- How to Copy Trade With MetaTrader
Copy trading provides a useful way for beginner level traders to learn from experienced traders.
- What are Forex Expert Advisors?
Forex Expert Advisors (EAs) enable the automation of forex trading.
- How to Use The Accumulation/Distribution Indictor in Forex
The Accumulation/Distribution (A/D) indicator can determine buying and selling pressures of a currency pair as it helps identify the relationship between the currency pair's price and volume.
- What is Commodity Channel Index?
The Commodity Channel Index (CCI) is a technical indicator that can identify overbought or oversold levels in market conditions as well as potential trend reversals and trade signals.
- Top Fundamental Trading Strategies You Should Know
Fundamental trading strategies are popular among traders who want to make informed investment decisions based on real-world data and events rather than solely on technical analysis.
- How to Use Martingale Strategy For Trading
The Martingale strategy acts as a popular high-risk trading strategy used in various financial markets including Forex and stocks.
- What is The Forex Linear Regression?
Forex linear regression enables you to predict future price movements by comparing the current and historical currency pair prices.
- Top Advanced Forex Trading Strategies You Should Know
Advanced forex trading strategies are perfect for experienced forex traders.
- What is The Oscillator of Moving Average in Forex?
The Oscillator of Moving Average (OsMA) is a technical indicator that helps in determining a trend’s strength in the forex market.
- How to Trade With The On Balance Volume Indicator
The On Balance Volume (OBV) indicator analyses the forex price momentum to measure the market’s buying and selling pressure.
- How to Use The Alligator Indicator in Forex Trading
The Alligator indicator can identify market trends and determine ideal entry and exit points based on the trend’s strength.
- How to Use Inside Bar Trading Strategy
Inside bar trading offers ideal stop-loss positions and helps identify strong breakout levels.
- What is the Martingale Trading Strategy in Forex?
The Martingale trading strategy increases the possibility of winning a trade in the forex market.
- How to Use The Forex Arbitrage Trading Strategy
Forex arbitrage trading strategy allows you to profit from the difference in currency pair prices offered by different forex brokers.
- The Beginner’s Guide to MQL5
MetaTrader, as a platform, has built-in functions that assist in technical analysis and trade management while also allowing traders to develop their own indicators and trading strategies.
- How to Use DeMarker Indicator For Forex Trading
Every trader needs to know precisely when to enter or exit a forex market.
- How to Use The Accelerator Oscillator For Forex Trading
The Accelerator Oscillator indicator helps detect different trading values that protect traders from entering bad trades.
- A Forex Trader’s Guide to Awesome Oscillator
When you understand market momentum, you can better identify market reversals.
- What is Money Flow Index?
The Money Flow Index can analyse the volume and price of currency pairs in the market.
- What is The Ichimoku Kinko Hyo Indicator?
The Ichimoku Kinko Hyo indicator provides traders with the market’s current momentum, direction and trend strength.
- Top Pullback Trading Strategies
Pullback trading strategies provide traders with ideal entry points to trade along with the existing trend.
- What is High Wave Candlestick?
The High Wave Candlestick pattern occurs in a highly fluctuating market and provides traders with entry and exit levels in the current trend.
- What is the Parabolic SAR indicator?
Identifying market trends becomes easier with the Parabolic SAR indicator as it provides the ideal entry and exit signals in strong trending markets.
- What is Currency Correlation?
Currency correlations help trade multiple currencies in the forex market by identifying the market trends of each currency pair.
- Price Action Trading Strategy
A Price Action Trading Strategy helps find ideal entry and exit points depending on expert opinions,news announcements, or technical indicators.
See AlsoBull Bear Power — TradingView - Average True Range
Average True Range (ATR) helps in identifying how much a currency pair price has fluctuated. This, in turn, helps traders confirmprice levels at which they can enter or exit the market and place stop-loss orders according to the market volatility.
- Moving Average Crossover
The Moving Average Crossover is a valuable tool to find the middle price-point of a trend in forex trading.When currency prices crossover their current moving averages, it helps traders identify the favorable buying or selling points for the currency.
- What is the Bullish Engulfing Candlestick?
Bullish Engulfing Candlesticks helps in identifying an uptrend reversal in the market.This candlestick pattern stands out because a trader does not need to wait until the entire pattern is completed to enter a trade.
- How To Trade The Gartley Pattern
The Gartley pattern helps identify price breakouts and signals where the currency pairs are headed. The pattern is also widely usedin the forex market to determine strong support and resistance levels.
- How to Trade Forex With NFP V-Shaped Reversal
A Non Farm Payroll (NFP) V-shaped reversal refers to a sudden increase or decrease in the currency pair prices right after an NFP report is released.
- Candlestick Patterns: Top Candlestick Charts Every Trader Should Know
Candlestick patterns depict the price movement of assets in a graphical manner. Candlestick patterns also enable traders to predict market behaviour.
- What is the Evening Star Candlestick Pattern?
Evening Star Candlestick Patterns help traders identify ideal exit levels in the forex market by signalling a slowed upward momentum and strengthened downward momentum.
- How to Use Ichimoku Cloud in Forex?
The Ichimoku Cloud provides a clear market trend direction to the traders and helps them make market decisions accordingly.
- Pennants Pattern: How to trade bearish and bullish pennants
Pennant Patterns work as a continuation signal in the forex market and help identify the ideal entry and exit price points
- How to Trade Forex With Renko Charts
Renko Chart is a technical indicator that provides strong market trend directions by filtering out minor price movements
- What are Ascending and Descending Triangle Patterns?
The Ascending and Descending Triangle Patterns confirm continued trends in the forex market.
- How to Identify Cup and Handle Pattern in Forex Trading
The Cup and Handle Pattern is a technical price chart that forms the shape of a Cup and a Handle, which indicates a bullish reversal signal.
- What is the Head and Shoulders pattern?
The Head and Shoulders pattern is a trend reversal indicator that predicts bullish to bearish and bearish to bullish reversals in the forex market.
- What is the Hammer Candlestick Pattern?
Hammer Candlesticks enable traders to identify potential market reversal points, determine the ideal time to enter the market and place buy or sell orders accordingly.
- What is The Opening Range Breakout Strategy
The Opening Range Breakout (ORB) Strategy involves taking forex positions when the currency pair prices break below or above the previous day's high or low
- Morning Star Indicator
The Morning Star Indicator helps identify strong trend reversals in the forex market and enables you to take trade position entry decisions accordingly.
- How Does Stochastic Indicator Work in Forex Trading?
Stochastic Indicator helps traders identify overbought and oversold market conditions that substantially lead to market reversals.
- Favourite Fib Fibonacci Retracement
Fibonacci retracement strategies help traders identify the market's support and resistance levels, trend reversal points, and entry and exit decisions.
- Heikin Ashi Candlestick Pattern
The Heikin Ashi Candlestick pattern is almost the same as the traditional candlesticks, with one big difference—the former is an averaged out version of the latter.
- Multiple Time Frame Analysis in Forex
By monitoring different currency pairs in different time frames, you can make your Forex trades more successful and profitable.
- What are Bollinger Bands?
The Bollinger bands can help identify overbought and oversold market conditions, protecting you against placing any orders that could lead to losses.
- Andrew's Pitchfork Trading Strategy
Andrew's Pitchfork is a Forex trading strategy that can predict protracted market swings and help you in identifying potential markettrends that can indicate potential exit and entry points.
- Fibonacci Retracement
Fibonacci retracements are one of the most popular methods for predicting currency prices in the Forex market. Predicting upwardor downward market movement can help traders with accurate price analysis for exiting or entering the market.
- Trading in Volatile Markets
Forex volatility is the measure of how frequently a currency's value changes.A currency either has high volatility or low volatility depending on how much its value deviates from its average value.
- The ABCD pattern
One of the most classic chart patterns, the Forex ABCD pattern represents the perfect harmony between price and time.
- The Bearish Gartley Pattern
The Bearish Gartley pattern was introduced in 1935, by H.M. Gartley in his book, “Profits in the Stock Market”.The pattern helps Forex traders in identifying higher probabilities of selling opportunities.
- The Bullish 3 Drive pattern
The Bullish Three Drive pattern in Forex trading is a rare pattern that gives traders information aboutthe Forex market's potential at its most Bearish point, and in turn, suggests probabilities for a market reversal.
- What is the MACD Indicator?
The Moving Average Convergence Divergence (MACD) indicator helps traders quickly identify short-term trend directions andreversals in the forex markets. You can use the MACD indicator to determine a currency pair price trend's severity and measure itsprice's momentum and even identify the bearish and bullish movements in the currency pair prices.
Guide to Forex
Trading indicators.
Enter your details to get a copy of our
free eBook
Thank you, please check your inbox for your ebook.
Start a risk free
demo account
Create Demo Account
News & Analysis
Catch up on what you might
have missed in the market.
Ready to trade at
Blueberry Markets?
Your highly-rated trading experience
is a click away
Create live account
Try demo account
