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Automated-Trading
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93787
Automated-Trading 2009.12.25 14:02 

Bulls Power:

Everyday trading represents a battle of buyers ("Bulls") pushing prices up and sellers ("Bears") pushing prices down. Depending on what party scores off, the day will end with a price that is higher or lower than that of the previous day. Intermediate results, first of all the highest and lowest price, allow to judge about how the battle was developing during the day.

It is very important to be able to estimate the Bulls Power balance since changes in this balance initially signalize about possible trend reversal. This task can be solved using the Bulls Power oscillator developed by Alexander Elder and described in his book "Trading for a Living: Psychology, Trading Tactics, Money Management". Elder based on the following premises when deducing this oscillator:

  • moving average is a price agreement between sellers and buyers for a certain period of time,
  • the highest price displays the maximum buyers' power within the day.

On these premises, Elder developed Bulls Power as the difference between the highest price and 13-period exponential moving average (HIGH - EMA).

Author: MetaQuotes Software Corp.

Bulls Power

Sergey Golubev
Moderator
53361
Sergey Golubev 2013.08.26 17:14  
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