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Bull and Bear Power Indicator Guideline

The Bulls and Bears power indicator for MT4 is an extremely powerful tool, used among a lot of investors to determine whether they Should enter or exit the market. Bulls and Bears power indicator in MT5 is divided into 2 indicators. Bull Power and Bear Power. The Bulls and Bears power indicator in Tradingview is based on the market sentiment and the Exponential Moving Average (EMA).

Bull and Bear power Guide

What is a Bull and Bear power indicator?

Bull and Bear power indicator was created by Dr. Alexander Elder for MT4 and intended to measure the amount of pressure over the selling and buying of a certain asset in the market. At first, he referred to it as the “Elder-Ray Index”. The “Ray” means that the indicator can see through the overall market sentiment. In other words, it can detect Bearish and Bullish investors. Similar to the “X-Ray Machine” that can see through the human body. In addition to the Bullish and Bearish market sentiments, the Bull and Bear indicators use the exponential moving average (EMA) to determine the strength of the 2 sides.

Furthermore, the exponential moving average commonly uses a 13 days time frame as a base of calculation. But it could be customized depending on the users’ preferences. Before moving to the next section, we need to understand the following 2 terms:

  • Bullish: means that the investor is optimistic about the asset’s current situation. In other words, the investor believes that the asset’s price will significantly increase (Of course many technical indicators could detect Bullish trends in a chart).
  • Bearish: means that the investor is a pessimist about the asset’s current situation. In other words, the investor believes that the asset’s price will fall (in like manner, many technical indicators could detect Bearish trends in a chart).

How Do you read a bull and bear power signals?

The Bulls and Bears power indicator is a little bit hard to read for new traders that have no experience with MT5. But hopefully, in this course, we’re going to simply explain it. As an example, we’re going to apply the Bull and Bear power indicator for “EURUSD H4”. For one thing, we can observe that there are 2 alert points in the following chart. The first alert point is for a potential downtrend. Where the indicator signals users of the potential reversal in the trend. So they may take action immediately to avoid any catastrophic losses. As for the Second Alert point, it is for a potential uptrend, where the indicator informs users immediately so they may lock in the highest possible profit. (the spread between buying at a low price and selling at the highest possible price).

The way of reading for the Bull and Bear power indicator for Tradingview is a little bit different, we’ll see to it in the demonstration. However, it is advised to use other technical indicators along with the Bull and Bear power indicators to get accurate and precise.

How To read the Indicator

How do you trade with the bull and Bear power indicator?

In this section, we’re going to explain a simple efficient strategy to trade and make money using the Bull and Bear power indicators Tradingview. To explain our strategy, we’re going to analyze the following chart of the “GBPUSD” over a 1-hour time frame. Therefore, points A and B of the Bearish chart indicate a potential reversal the price result was high and there are signs of a potential downtrend. At those points, it is advised to use any other indicator that could confirm the trend and then sell immediately if true. However, Points C, D, and E of the Bullish chart are the indication of a potential reversal, in other words, a potential uptrend. At those points, it is also advised to use any other indicator for confirmation and then proceed to buy.

Therefore, the decision rule is simple:

  • Buy when the Bull Chart goes from below to above the 0 lines.
  • Sell when the Bear Chart goes from above to below the 0 lines.
Indicator trading examples

This pattern tells us that the market sentiment is bullish and that investors are optimistic about the future price of the asset. Regardless, the 3rd candle is Bearish because the traders are a little worried that the asset may become overbought and a reversal may occur. However, this fear is offset by a Bullish 4th candle that forms above the 3rd candle.

The Bulls and Bears power tools have many advantages, but also some disadvantages that we’re going to discuss in this section.

Advantages:

Works on every time frame.
Can analyze any type of financial asset.
Cannot be manipulated by false trades and orders.
Available for popular platforms such as MT4, MT5, and Trading view.
Works on any chart including line charts, candlesticks charts.

Disadvantages:

Needs confirmation from any other technical indicator.
Hard to understand for new traders.
Using it alone without any confirmation from another indicator could lead traders to catastrophic losses.

How is bull Bear power calculated?

As stated earlier, the Bulls and Bears indicators use the EMA (ExponenTheaverage) as a way of comparison. The EMA is used to calculate and draw the sticks.

  • For Bullish indicator = High of the Candle – EMA

The result means that the Highs are either lower or Greater than the EMA.

  • For Bearish indicator = Lows of the Candle – EMA

The result means that the Lows are either Below or Above the EMA.

Download Bull and Bear power indicator for MT4

The Bull and Bear indicator MT4 allows traders to detect points in which they should either enter or exit the market. As an example, we’re going to analyze the following chart of “US dollar vs Swiss Franc” in a 1-hour time frame using the Bull and Bear power indicators MT4. Starting with the Bearish indicator where we can observe 3 critical points: A, B, and C. At the 3 points, the Bull and Bear power indicators MT4 alert users of a potential reversal in the trend.

In other words, a potential downtrend, thus, they should sell immediately to avoid catastrophic losses. However, observing the Bullish indicator, we can detect 2 critical points: D, and E. At those 2 points, the Bull and Bear indicator MT4 alerts users of a potential reversal in the trend. Meaning, that there will be an uptrend nearby. The traders should proceed to buy the asset now so they may lock in the highest possible profit using the Bull and Bear Power Indicators MT4.

Bull and Bear Power Indicator for MT4

Download Bull and Bear power indicator for MT5

The Bull and Bear indicator MT5 allows traders to detect points in which they should either enter or exit the market. For example, we’re going to study the following chart of “US dollar vs Japanese YEN” in a 1-hour time frame. Starting with the Bearish indicator where we can observe 3 critical points: A, B, and C. At the 3 points, the Bull and Bear Power Indicators MT5 alert users of a potential reversal in the trend. In other words, a potential downtrend, thus, they should sell immediately to avoid catastrophic losses. However, observing the Bullish indicator, we can detect only 1 critical point: D. At this point, the Bull and Bear indicator MT5 alert users of a potential reversal in the trend, meaning, that there will be an uptrend nearby. The traders should proceed to buy the asset now so they may lock in the highest possible profit using the Bull and Bear Power Indicators MT5.
Bull and Bear power indicator for MT5

Download Bull and Bear power indicator for Tradingview

The Bulls and Bears indicators are available on Tradingview. However, the reading method is a little bit different from the one for MT4 and MT5. For instance, we can observe in the following chart that both indicators display a line chart instead of colored sticks. The judging rule is very simple, yet quite hard to detect for newbies. 

You should look for divergence in both charts, that’s when you should BUY or sell depending on the previous trend. Illustrated by points 1 and 3, a potential reversal of prices, meaning a downtrend where traders should exit the market to avoid catastrophic losses. On the other hand, at points 2 and 4, the Bulls and Bears Indicators Trading View alerts users of the Potential uptrend nearby, allowing them to take action and lock in the highest possible profit.

Bull and bear power indicator for Tradingview

Conclusion

The Bulls and Bears indicators are some powerful tools. As they used by professionals to observe the behavior of the market, and then detect possible opportunities to either enter or exit the market. However, the Bulls and Bears indicators need confirmation from other complementary technical indicators to make sure that the observed trend is valid.

Key takeaways

  • The Decision rule: BUY when Bull goes from Below to Above 0, and SELL when Bear goes from Above to Below 0.
  • Use ANY other technical indicator that could confirm the potential nearby trend.
  • The calculation of the Bulls and Bears Power Indicators is based on the comparison with the Exponential Moving Average.
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