Bears Power - Bulls Power

This indicator aims to identify underlying movements, which are not obvious from through other techniques. It is concerned with Exponential Moving Averages (EMA), and has two key components being the “bull power” and “bear power”. The aim is to identify whether the buyers or sellers in the market have the power. The ideal period suggested for this indicator is 13 days.

Bull Power

The buyers in the market are trying to raise the price of the instrument hence if the price at the end of the market session (or at any point) is above the EMA then they are succeeding in raising the price.

Bull Power = Highest Price (in time period) – EMA

Bear Power

In contrast the sellers in the market are trying to lower the price of the instrument.

Bear Power = Lowest price (in time period) – EMA

It is therefore important to identify the whether the Bears (Sellers) or Bulls (Sellers) have the power to establish when there may be a change is the market trend.

Buy ifSell
There is an increasing trendThere is a decreasing trend
Bears Power indicator is negativeBull Power indicator is positive, but decreasing gradually
Peak of Bear indicator is higher than the previous oneTrough of Bull indicator is lower than the previous one
Bear indicator increases after the Bull divergesBull indicator decreases after the Bull diverges
Both bull power and bear power are plotted as histograms under the bar chart of your chosen security.