Bull & Bear Power (Elder-Ray)
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Elder-Ray Index: Measuring the Power of Bulls and Bears
Updated: 2026-03-01 · Expert Analysis by Senior Trading Analyst · SEO Optimized for Beginners
Executive Summary
The Elder-Ray Index, developed by Dr. Alexander Elder, uses an X-ray-like approach to see the buying and selling pressure beneath the surface of the market. It consists of two oscillators: Bull Power and Bear Power, which are used in conjunction with an Exponential Moving Average (EMA).
1. The Calculation: Price vs. Value
Elder defined the EMA as the "average value" of a security. Bull Power measures the ability of buyers to push prices above the average value, while Bear Power measures the ability of sellers to push prices below it.
- Bull Power: Daily High - 13-period EMA
- Bear Power: Daily Low - 13-period EMA
2. Trading Signals
The primary signal is a divergence. If price makes a lower low, but Bear Power makes a higher low (while the EMA is rising), it's a powerful buy signal. Conversely, if price makes a higher high but Bull Power makes a lower high, it's a sell signal.
3. Conclusion
The Elder-Ray Index is a professional-grade tool for understanding market psychology. It tells you if the bulls or bears are growing stronger or weaker relative to the average value. Use it to find high-probability reversal points in trending markets.
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