Bear Power Signals Using the Elder Ray Indicator

Summary

This strategy uses the Elder Ray Bear Power measure to take long or short positions. It calculates Bear Power as the daily low minus an exponential moving average of the closing price, with a configurable length and trigger threshold. A move above the threshold sets a long position; a move below it sets a short position. A reverse-trade option swaps those directions.

The document explains that Bear Power represents sellers’ ability to push prices below the average value suggested by the EMA. It provides the indicator formula and trading rules, but reports no performance results. The supplied settings describe a BTC/USDT futures backtest over a short December 2023 sample; they do not establish profitability. The strategy has no stop-loss rule, and the document warns that a single indicator can produce false signals and that poorly chosen parameters may cause excessive trading.

Key ideas

• Bear Power is calculated as the daily low minus an EMA of the closing price.
• The strategy goes long above a chosen threshold and short below it.
• A reverse-trade setting swaps the direction of the signals.
• The document identifies false signals, missing stop-loss protection, and parameter sensitivity as key limitations.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.