Elder Ray Index (Bull & Bear Power)

Measure the strength of buyers and sellers relative to the trend.

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Elder Ray Index (Bull & Bear Power) chart

Overview

What is Elder Ray Index (Bull & Bear Power)?

The Elder Ray Index, developed by Dr. Alexander Elder and introduced in his landmark book "Trading for a Living" (1993), consists of two separate indicators: Bull Power and Bear Power. Together, they measure how far above or below a 13-period EMA the daily high and low reach — capturing the relative strength of buyers and sellers.

Bull Power = Daily High − 13-period EMA. A positive Bull Power indicates buyers are strong enough to push price above the average; negative Bull Power indicates buyers are unusually weak. Bear Power = Daily Low − 13-period EMA. A negative Bear Power indicates sellers can push price below the average; a positive Bear Power indicates sellers are unusually weak.

Elder's trading rules combine both components with the EMA trend direction: in an uptrend (rising 13-EMA), buy when Bear Power is negative (sellers are active but buyers have structural control) and Bear Power is rising from its lowest recent value (selling pressure is diminishing). In a downtrend (falling 13-EMA), sell when Bull Power is positive but declining.

The genius of Elder Ray is that it identifies the ideal entry point: the brief, temporary weakness within a strong trend where risk is minimised. A slight pullback in Bull Power during an uptrend is exactly where long entries should be considered, not at peaks of bullish momentum.

How It Works in auto-Trading

Automate It

auto-Trading computes Bull Power and Bear Power with a configurable EMA period (default 13). The strategy builder supports conditional triggers: Bull Power crossing above/below zero, Bear Power divergence from price, and combined Elder Rule signals (EMA trend + oscillator position). Elder Ray signals integrate natively with the Triple Screen system for refined entry timing.

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External Resources

Learn from Trusted Sources

Investopedia — Elder Ray Index↗

Overview of the Elder Ray Index and its component indicators.

TradingView — Elder Ray Scripts↗

Elder Ray Bull and Bear Power scripts on TradingView.

Elder.com↗

Dr. Elder's official resources on Bull Power and Bear Power.

Strategy Code

Pick a script below, copy it, and use it on your chart.

Pine Script (TradingView)

This is a TradingView Pine Script example for this indicator. Paste it into the TradingView Pine Editor, add it to your chart, and adjust inputs for your market and timeframe.

//@version=6
indicator("Elder Ray Index (Bull & Bear Power)", overlay=false)
length    = input.int(13, "EMA Length")
emaVal    = ta.ema(close, length)
bullPower = high - emaVal
bearPower = low  - emaVal
longSignal  = bullPower > 0 and bearPower > bearPower[1] and emaVal > emaVal[1]
shortSignal = bearPower < 0 and bullPower < bullPower[1] and emaVal < emaVal[1]
plotshape(longSignal,  style=shape.triangleup,   location=location.bottom, color=color.green, size=size.small)
plotshape(shortSignal, style=shape.triangledown, location=location.top,    color=color.red,   size=size.small)
hline(0, "Zero", color=color.gray, linestyle=hline.style_dotted)
plothistogram(bullPower, "Bull Power", color=color.new(color.green, 0))
plothistogram(bearPower, "Bear Power", color=color.new(color.red,   0))

ThinkScript (thinkorswim)

This is a thinkorswim ThinkScript example for this indicator. Open thinkorswim, create a custom study, paste the script, and apply it to your chart.

input length = 13;
def emaVal = ExpAverage(close, length);
def bullPower = high - emaVal;
def bearPower = low - emaVal;
def buySignal = bullPower > 0 and bearPower > bearPower[1];
def sellSignal = bearPower < 0 and bullPower < bullPower[1];
AddOrder(OrderType.BUY_AUTO, buySignal, close, 1, Color.GREEN, Color.GREEN, "Elder Buy");
AddOrder(OrderType.SELL_AUTO, sellSignal, close, 1, Color.RED, Color.RED, "Elder Exit");
plot Bull = bullPower;
Bull.SetDefaultColor(Color.GREEN);
plot Bear = bearPower;
Bear.SetDefaultColor(Color.RED);

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