Calculating a Bull and Bear Power Oscillator from Price Extremes

Summary

This document defines a bull and bear power oscillator using binary signals derived from each bar’s high and low relative to an exponential moving average of closing prices. A bull signal is set when the high exceeds the EMA, while a bear signal is set when the low falls below it. Each signal is averaged over a configurable range, and the oscillator is calculated as one hundred times the difference between the two averages. The period controls the EMA, while the range controls the smoothing of the bull and bear readings.

The explanation supplies the formula and parameter roles, but no chart examples, market tests, or evidence about predictive performance. Because the component readings are binary, the oscillator summarizes the relative frequency of bars breaching the EMA on either side; it does not directly measure the size of those price moves. The document is a translated indicator description and offers no trading rules, entry or exit guidance, or discussion of how to combine the oscillator with risk controls.

Key ideas

• The EMA is calculated from closing prices using a configurable period.
• Bull and bear readings are binary conditions based on whether the bar high or low crosses the EMA.
• Simple moving averages over a configurable range smooth each side’s readings.
• The oscillator scales the difference between average bull and bear readings by one hundred.
• No trading rules or performance evidence are provided.

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