Bulls Power Oil Technical Analysis and Bulls Power Trading Signals
Created by Alexander Elder
Bulls Power is used to estimate power of the Bulls (Buyers). Bulls Power estimates the balance of power between the bulls & bears.
This oil indicator aims at identifying if a bullish oil trend will continue or if the crude oil price has reached a point where it might reverse.
Calculation
A Oil Price bar has 4 parameters: the Opening, Closing, High and Low of the crude oil price bar.
Each Oil Price bar either closes higher or lower than the previous crude oil price bar.
The highest crude oil price will indicate the maximum power of the Bulls within a crude oil price period.
The lowest crude oil price will indicate the maximum power of the Bears within a crude oil price period.
This Indicator uses the High of the crude oil price and a Moving Average (Exponential)
The moving Average represents the middle ground between sellers and buyers for a certain crude oil price period.
Therefore:
Bulls Power = High Oil Price - Exponential Moving Average
Bulls Power
Crude Oil Technical Analysis & How to Generate Trading Signals
Buy Crude Trading Signal
A buy oil signal is generated when the Bulls Power oscillator moves above Zero.
In an up oil trend, the HIGH is higher than EMA, so the Bulls Power is above zero & Histogram/Oscillator is located above zero line.
Exit Trading Signal
If the HIGH falls under EMA then it means that crude oil price are starting to fall, the Bulls Power histogram fall below the zero line.
The Triple Screen method for this indicator suggests identifying the crude oil price crude oil trend on a higher chart interval (like daily time frame) and applying the bulls power on a lower chart interval (like hourly time frame). Signals are traded according to the indicator but only in direction of the long term oil trend in the higher time frame.
