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Harnessing the Power of Elder-Rays: A Trader's Guide to Bulls and Bears

Mike • 2005-11-29 20:52
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The Elder-Rays Technical Indicator is a powerful tool that blends trend-following indicators with oscillators. At its core, it utilizes the Exponential Moving Average (EMA), with a recommended period of 13, to track price movements. The oscillators within the Elder-Rays framework measure the strength of bulls and bears in the market.

Bears Power, Bears

Elder-Rays can be used on their own or combined with other trading strategies. When trading with Elder-Rays alone, it’s crucial to recognize that the slope of the Exponential Moving Average indicates the trend direction, and you should open positions in line with that trend. The Bulls and Bears Power oscillators help pinpoint the best moments for entering and exiting trades.

Consider buying if:

  • The trend is on the rise (as shown by the movement of the Exponential Moving Average);

  • The Bears Power oscillator is in the negative zone but showing an upward trend;

  • The latest peak of the Bulls Power oscillator exceeds the previous peak;

  • The Bears Power oscillator is rising after a bullish divergence has occurred.

When the Bears Power oscillator shows positive values, it’s wise to tread carefully and wait for the right opportunity.

Consider selling if:

  • The trend is declining (evident from the movement of the Exponential Moving Average);

  • The Bulls Power oscillator is in positive territory but gradually decreasing;

  • The last trough of the Bulls Power oscillator falls below the previous trough;

  • The Bulls Power oscillator drops, indicating a bearish divergence.

Be cautious about opening short positions when the Bulls Power oscillator is in the negative range. The divergence between the Bulls and Bears Power oscillators and price action presents the best trading opportunities.

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