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Key Takeaways

Difficulty:Intermediate
Reliability:High
Category:momentum
Timeframes:Daily, Weekly

Elder Ray Index

momentumšŸ“Š Daily, Weekly

Dr. Alexander Elder's indicator measuring Bull Power and Bear Power relative to an EMA.

Formula

Code
Bull Power = High - EMA(13)
Bear Power = Low - EMA(13)

Detailed Explanation

Elder Ray was developed by Dr. Alexander Elder to measure buying and selling pressure.

**Components:** - **Bull Power**: Distance from high to EMA (buyer strength) - **Bear Power**: Distance from low to EMA (seller strength) - **EMA**: 13-period default

Parameters

EMA Period
Default: 13
EMA calculation period

šŸ“ˆ Bullish Signals

EMA rising, Bear Power negative but rising toward zero

šŸ“‰ Bearish Signals

EMA falling, Bull Power positive but falling toward zero

Python Implementation

Elder Ray calculation

Python
import pandas_ta as ta
df['EMA'] = ta.ema(df['close'], 13)
df['Bull_Power'] = df['high'] - df['EMA']
df['Bear_Power'] = df['low'] - df['EMA']

TradingView Pine Script

Try on TradingView
JavaScript
//@version=5
indicator("Elder Ray")
ema = ta.ema(close, 13)
bull = high - ema
bear = low - ema
plot(bull, "Bull Power", color=color.green, style=plot.style_histogram)
plot(bear, "Bear Power", color=color.red, style=plot.style_histogram)
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MT5 MQL5 Code

C++
int bears_handle = iBearsPower(_Symbol, _Period, 13);
int bulls_handle = iBullsPower(_Symbol, _Period, 13);

Python Libraries

pandas-ta
Technical analysis
pip install pandas-ta

Common Mistakes

āœ—Trading against EMA trend
āœ—Ignoring divergences

Confirmation Signals

EMA direction
MACD
Price action

Best For

Trend confirmationEntry timingPullback trading

šŸ’” Pro Tips

  • ā€¢Part of Elder Triple Screen System
  • ā€¢Bull Power shows buyer strength
  • ā€¢Bear Power shows seller strength
Last updated: December 29, 2024

Educational Disclaimer

This content is for educational purposes only and does not constitute financial or investment advice. Trading involves significant risk and you may lose your capital. Always consult a licensed financial advisor before making investment decisions.

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Frequently Asked Questions

Related Indicators

Exponential Moving Average (EMA)

EMA gives more weight to recent prices, making it more responsive to new information than SMA.

MACD (Moving Average Convergence Divergence)

MACD shows the relationship between two EMAs. Consists of MACD line, signal line, and histogram.

Relative Strength Index (RSI)

RSI measures the speed and magnitude of price changes, oscillating between 0-100 to identify overbought and oversold conditions.

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