Elder Ray Bull and Bear Power Signal Strategy

Summary

The Elder Ray indicator frames the exponential moving average as a reference for market value, then measures buying and selling pressure relative to it. Bull power is the high minus the EMA, while bear power is the low minus the EMA. The described strategy compares these measures with a configurable threshold to determine directional positions, with an option to reverse the signals. The source implementation specifically constructs bull power from the running daily high and the EMA of closing prices, so its mechanics do not fully match the broader description of comparing both bull and bear power.

The document provides BTC/USDT futures backtest settings for a one-month period, but reports no performance statistics. It warns that threshold signals can be false, fixed EMA periods may not adapt to changing conditions, and the rules lack stop losses and precise entry timing. Trend filters, stop-loss rules, and other indicators are suggested as possible additions; the source also frames the strategy as educational rather than ready for live deployment.

Key ideas

• Elder Ray measures price extremes relative to an exponential moving average used as a value reference.
• Bull power is defined as the high minus the EMA, while bear power uses the low minus the EMA.
• Threshold comparisons generate directional signals, and an option can reverse their direction.
• The source implementation uses a running daily high to calculate bull power and does not implement both measures as described.
• The document provides test settings but no performance results and flags false signals and missing stop losses.

Tags

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