What Bulls Power and Bears Power show
Bulls Power and Bears Power together form the Elder Ray, a method developed by trader Alexander Elder. They measure how far buyers and sellers pushed price away from an average value.
The average is an exponential moving average (EMA) of closing prices. An EMA weights recent bars more heavily than older ones.
- Bulls Power measures how far the bar's high rose above the EMA. It shows how strongly buyers pushed price up during the bar.
- Bears Power measures how far the bar's low fell below the EMA. It shows how strongly sellers pushed price down.
Both are drawn as histograms around a centre line. Bars above the line are positive and bars below it are negative.
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Formula and default settings
| Indicator | Formula |
|---|---|
| Bulls Power | High − EMA(Close, N) |
| Bears Power | Low − EMA(Close, N) |
N is the EMA period. MetaTrader ships with a default period in the input field, and Elder's own method uses the same period for the EMA plotted on the price chart. Both indicators normally use the same N.
Values are in price units, not percentages. A reading on gold therefore cannot be compared directly with a reading on a currency pair.
How to add it in MT4 and MT5
In both MetaTrader 4 and MetaTrader 5, open Insert → Indicators → Oscillators. Then pick Bulls Power or Bears Power.
Each indicator opens in its own subwindow. To view both in a single panel, drag the second indicator from the Navigator onto the first one's subwindow.
Add an EMA with the same period to the price chart, so you can see the trend that the histograms are measured against. Before you rely on the setup, practise it on a demo account.
How to read it: a drawn example
The chart below is an illustration, not real market data. It shows an uptrend that weakens.
Here is how to read it:
- Rising EMA with Bears Power negative but shrinking: sellers push the lows under the average, but less with each bar. Elder described this as a pullback inside an uptrend.
- Falling EMA with Bulls Power positive but shrinking: buyers are fading during a downtrend.
- Divergence: in the drawing, price makes higher highs while each Bulls Power peak is lower. This means buying pressure above the average is weakening. It is not a reversal signal on its own.
Typical uses
A Bulls Bears Power strategy usually works as a filter, not as a standalone system:
- Use the EMA slope to identify the trend.
- Use the histogram in the trend's direction to judge the depth of pullbacks.
- Use the opposite histogram to spot weakening momentum.
Many traders pair it with the Force Index, which Elder used for a similar purpose with volume added.
Parameter choices and edge cases
- Short N: reacts quickly, but the readings are noisy and cross the centre line often.
- Long N: smoother readings, with later reactions. Both histograms are lagging, because they are built from an EMA.
- Wicks: a single spike can create an extreme reading that the bar's close does not support. Check the candle before you treat the reading as meaningful.
- Gaps and thin sessions: highs and lows jump in these conditions, and the histograms exaggerate the move.
- Changing volatility: readings grow simply because ranges widen, not because one side became stronger. Comparing the readings with the ATR helps you judge this.
Where it misleads
- Sideways markets: the EMA goes flat and the trend filter stops working. Both histograms then flip around the centre line.
- Strong trends: Bears Power can stay negative for long periods in a valid uptrend, so a "weak bears" reading may never appear.
- Divergence: it can persist for many bars while the trend continues.
- Timeframes: one timeframe can contradict another. Checking multiple timeframes reduces surprises but does not remove them.
No indicator setting removes risk. Leveraged CFD and forex trading can lose money fast, so plan position size and stops with the risk management basics.
Frequent questions
Is the Bulls Power indicator the same as the Bears Power indicator?
No. They use the same EMA, but Bulls Power measures the high against it and Bears Power measures the low against it.
Which EMA period should I use?
There is no correct period. Start with the MetaTrader default, then test longer and shorter settings on historical charts.
Can Bulls and Bears Power be used alone?
It is usually combined with the trend shown by the EMA and with price structure. On its own, it gives many false readings.
Does it repaint?
Values on closed bars do not change. The current bar's value moves until that bar closes.
Where can I learn related tools?
See the technical analysis section for related indicators and chart methods.