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Elder-ray

The Elder Ray is an indicator of technical analysis, which was developed by American technical analyst Alexander Elder. The indicator is indispensable to estimate when the power of bulls and bears is stronger or weaker.

The bulls’ priority is expressed by a value with a plus sign and the bears’ priority is expressed by a value with a minus sign. One can plot Elder Rays by means of three diagrams: one is for price charts and EMA, while two others are for Bulls Power and Bears Power Oscillators. The Elder Ray Indicator can be used by itself and along with other methods. If the indicator is used separately, one should take into account that EMA incline defines the trend direction and positions should be opened along with it. Bulls Power and Bears Power Oscillators are used to indicate the moment of position opening and closing.

Elder recommends to purchase in the following cases:

There is an uptrend (it is indicated by EMA direction).

Bears Power Oscillator is negative, but it increases.

The last peak of Bulls Power Oscillator is higher than the previous one.

Bears Power Oscillator rises after the bullish divergence.

However, if Bears Power Oscillator is positive, traders should refrain from purchasing.

Elder recommends selling in the following cases:

There is a downtrend.

Bulls Power Oscillator is positive, but it descends.

Bulls Power Oscillator decreases coming out of bearish divergence.

It is recommended not to open short positions, if Bulls Power Oscillator is negative.

Divergence between Bulls Power and Bears Power and prices is the most successful time for trading.

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