Bull Bear Power

Definition

The Bull Bear Power (BBP) indicator, otherwise known as the Elder-Ray Index, estimates the relationship between the strength of bulls (buyers) and bears (sellers) on an instrument. When the indicator's value is nonzero, it supposedly suggests that either bulls or bears have more power in the market. The greater the distance is from zero, the greater the apparent dominance of bulls or bears. Positive values indicate higher bull power and negative values indicate higher bear power.

Calculations

The indicator's calculation consists of two separate components: "Bull Power" and "Bear Power". The "Bull Power" value is the difference between the current high price and the EMA of close prices, and the "Bear Power" value is the difference between the current low price and the same EMA. Taking the sum of the "Bull Power" and "Bear Power" gives us the Bull Bear Power value:

Bull Power = High - EMA

Bear Power = Low - EMA

Bull Bear Power = Bull Power + Bear Power

Inputs

Length

The length for the EMA's smoothing parameter calculation. Its default value is 13.