Bulls Power Indices Technical Analysis and Bulls Power Trading Signals

Created by Alexander Elder

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

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

Calculation

A Indices Price bar has 4 parameters: the Opening, Closing, High and Low of the stock indices trading price bar.

Each Indices Price bar either closes higher or lower than the previous stock indices trading price bar.

The highest stock indices trading price will show the maximum power of the Bulls within a indices trading price period.

The lowest stock indices trading price will show the maximum power of the Bears within a indices trading price period.

This Indicator uses the High of the stock indices trading price & a Moving Average (Exponential)

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

Therefore:

Bulls Power = High Indices Price - Exponential Moving Average

Bulls Power

Indices Technical Analysis and How to Generate Trading Signals

Buy Trading Signal

A buy stock indices signal is generated when the Bulls Power oscillator moves above Zero.

In an up indices trend, the HIGH is higher than EMA, so the Bulls Power is above zero & Histogram/Oscillator is located above zero line.

Exit Trading Signal

If the HIGH falls under EMA then it means that stock indices trading price are starting to fall, the Bulls Power histogram fall below the zero line.

The Triple Screen technique for this indicator suggests identifying the stock indices price trend on a higher chart interval (like daily time frame) and applying the bulls power on a lower chart interval (like hourly time frame). Signals are traded according to the indicator but only in direction of the long term indices trend in the higher time frame.