You are probably asking yourself how effective the Bears power indicator is in trading. Well, there is no perfect tool for Forex trading. Having said that, this indicator gives fairly accurate trading signals.
First, it shows you when the bearish trend is about to come to an end, and second, it indicates the right time to get into a bullish trade. How does this happen? When the Bears power crosses from the bottom up, above the zero line, we know that the bulls have taken control of the price. This is a good time to find buy signals. To avoid jumping in too early, wait for the indicator to come back near the zero line, then take your trade when it starts moving up again.
The bear power indicator is more effective on higher time frames, even though it will give sparse signals. Trading on lower time-frames like the 5 minutes charts calls for extra analysis to find adequate confluence before taking a position. The Bulls power indicator shows the mood of the buyers in the market. It does this by finding the difference between the highest price and the EMA. The exponential moving average is preferred over the simple moving average because it spots a trend faster and more accurately.
The Bulls power oscillator indicator will be above the zero line if the difference between the highest price and EMA is positive. When the histogram is in the negative zone, it tells us that buyers have significantly lost strength. It is exactly the opposite of the Bears power indicator.
The best way to be profitable with the Bulls power indicator is to use it to find an early entry. So instead of waiting for the histogram to leave the positive zone for you to go short, you may want to find divergence. This is how hawk-eyed traders catch early entries with the Bulls power strategy.
See the chart below. Divergence occurs when the trend of the price and the histogram are moving in opposite directions. In the chart above, the histogram is clearly showing us that the bears are seriously undermining the bulls, but the price still seems to be going up. Prepare for a strong drop in price whenever you come across this market behaviour. The EMA 13 is the most common value, as it was recommended by Alexander Elder when he created this strategy.
The highest price of a candlestick shows the extent of bullish strength during that period, while the lowest price represents the extent of bearishness within that bar. So, comparing that to the EMA 13 is an effective way of calculating Bulls power and bears power strength.
Anyone can use bulls and bear power indicators mt4 because they are found in most trading platforms by default. You need to load them on your meta trader charts before using them, which is a very easy process:. Remember these are two separate indicators, so you need to add each of them to your charts individually. However, you may always experiment and backtest your personalized settings.
The original method by A. The latter demonstrates trend direction , while the remaining two indicators are used for finding entry points. The last peak of the Bulls Power histogram is above the previous one. Bears Power has formed a bullish divergence: on the price chart, the new low is lower than the previous one, while in the histogram, a new low is above the preceding one. After the signal forms, place a pending buy order or enter by the market a bit higher than the high of the last two candlesticks.
Place a Stop Loss behind the local low on the price chart and take your profit when a strong resistance area is reached or some evidence of a reversal downwards appears. The last bottom of the Bears Power histogram is below the previous one. Bulls Power has formed a bearish divergence: on the price chart, the new high is higher than the previous one, while in the histogram, a new high is below the preceding one.
After the signal appears, place a pending sell order or enter by the market a bit lower than the low of the last two candlesticks. Place a Stop Loss behind the local high on the price chart and take your profit when a strong support area is reached or some evidence of a reversal upwards appears.
Bulls Power and Bears Power help the trader estimate the current balance of powers of buyers and sellers in the market and provide extra trading opportunities. To increase the efficacy of your trading, use them alongside other indicators and tech analysis instruments. To check the profitability of signals and improve your trading skills, practice on a demo account first. Find out more about A. Has traded in financial markets since The knowledge and experience he has acquired constitute his own approach to analyzing assets, which he is happy to share with the listeners of RoboForex webinars.
Timofey Zuev. It is high time to look around while there are not much statistics around. The pair can be traded by fundamental or tech analysis and with the help of indicators. This article explains what NFTs are and shares a Top 5 list of companies connected to non-fungible tokens. This new exchange market week will be full of statistics. Investors will keep analysing global economies and geopolitics. There are still too many emotions in quotes. The article describes the way of combining the EMA and Awesome Oscillator on H1, peculiarities of this medium-term trading strategy, and money management rules.
Every week, we will send you useful information from the world of finance and investing. We never spam! Check our Security Policy to know more. Try Free Demo. How do Bulls Power and Bears Power work? Bulls Power and Bears Power indicators Installing and setting up the indicators Bulls Power and Bears Power are included in many popular trading terminals.
Installing the indicators, specify the following parameters in the setting window: Period: the author recommends 13; Apply to: choose the necessary price type here. By default, Close I used; Style: choose the width and color of the histogram bars. A signal to buy A signal to buy requires to two main conditions: EMA 13 is aiming upwards; an uptrend has already started or is just beginning; Bears Power is negative but growing — the bars are reaching 0 and higher.
Two more conditions which are not obligatory but increase the probability of a successful trade: 3. Bears Power: a signal to buy A signal to sell A signal to sell requires to two main conditions: EMA 13 is aiming downwards; a downtrend has already started or is just beginning; Bulls Power is positive but falling — the bars are reaching 0 and lower. Bulls Power: a signal to sell Bottom Line Bulls Power and Bears Power help the trader estimate the current balance of powers of buyers and sellers in the market and provide extra trading opportunities.
You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience. Necessary Necessary. Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website.
These cookies do not store any personal information. Non-necessary Non-necessary. Philosophy and how to read: I use this indicator when trading strictly on the daily timeframe. I have not tested it on other timeframes. In my trade system I start with both the monthly Vadim Gimelfarb's article in this issue , "Bull And Bear Balance Indicator," describes a method of deducing market sentiment from close-to-close price movement.
His system uses the various possible relationships between the previous close and current open, high, low, and close. Get started. Indicators, Strategies and Libraries All Types. All Types. Open Sources Only. Top authors: bullbear. HPotter Wizard. Bull Bear Power.
Forces of demand and supply dictate the price fluctuations in the Forex market. nirn.gewme.xyz › Education › Forex Articles. The Bear Power indicator attempts to measure the market's appetite for lower prices · The Bull Power indicator attempts to measure the market's.