Total Power Indicator is an updated version of the Alexander Elder’s Elder-Ray index, which is based on the power strength of bulls and bears, along with a 13 day EMA. The indicator was created by Daniel Fernandez in 2011 and was published in the magazine “Currency Trader.”
Total Power Indicator
The Elder-ray index was created with a main objective to determine trends based on pressure of bulls and bears. The indicator used three technical indicators, which showed how bullish and bearish price fluctuations were formed according to the price. The drawback of this index is that it does not make clear signals on market entrance.
Hence, the Total Power Indicator for MT4 was developed to provide particular outlook for the market price fluctuations, along with the difference between the current and previous price. The indicator includes the 13 day EMA and two Alexander Elder’s indexes – bull and bear power.
Possible uses of Total Power Indicator:
If 100 level is reached by either Bulls or Bears along with the Total indicator, then we can enter a long or short trade accordingly.
If Bull line crosses Bear line from the bottom upwards, then we have a buy signal. While if Bear line intersects Bull line from top downward, then it’s an indication to sell.
If either Bulls or Bears intersect the level of 50 to the topside, then we have bullish or bearish bias accordingly.
Note: Bull power is the green line. Bear power is the red line. Total power is the blue line.
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