The Elder-ray Index was developed by Dr Alexander Elder and uses a 13-day exponential moving average (EMA) to show the general market consensus of value.

Bull Power refers to the ability of buyers to push prices higher than the consensus of value. Bear Power displays the ability of sellers to send prices below the consensus of value.

Bull Power = Daily High - 13-day EMA

Bear Power = Daily Low - 13-day EMA

Follow these directions if you want to trade using the Elder-ray Index as part of your technical analysis:

• Only ever trade with the trend indicated by the 13-day EMA

• Go long if Bear Power is less than zero and there is a bullish divergence of the Bull Power
  

• Go short if the Bull Power is positive and there is a bearish divergence on the Bear Power