Elder-Ray Index

Filed Under » , , ,
Dictionary Says

Definition of 'Elder-Ray Index'

A technical indicator developed by Alexander Elder that measures the amount of buying and selling pressure in the market. This indicator consists of two separate indicators known as "bull power" and "bear power". These figures allow a trader to determine the position of the price relative to a certain exponential moving average (EMA).

Bull Power = Daily High - n-period EMA
Bear Power = Daily Low - n-period EMA

Investopedia Says

Investopedia explains 'Elder-Ray Index'

Technical traders will use the values of the bull and bear power along with divergence to make transaction decisions. Long positions are taken when the bear power has a value below zero but is increasing and the bull power's latest peak is higher than it was previously. A short position is taken when the bull-power value is positive but falling and the bear power's recent low is lower than any other previous bottom. The slope of the EMA can also be used in both cases to help confirm the direction of the trend.

Articles Of Interest

  1.

    The Elder-Ray Indicator: Seeing Into The Market

    Elder-ray helps determine the strength of competing groups of bulls and bears so you know when to buy and when to short.

  2. A Primer On The MACD

    Learn to trade in the direction of short-term momentum.

  3. When To Short A Stock

    Learn how to make money off failing shares.

  4. A Top-Down Approach To Investing

    Use a global view to determine which stocks belong in your portfolio.

  5. Top 4 Most Scandalous Insider Trading Debacles

    Here we look at some of the landmark incidents of insider trading.

  6. Market Summary for September 6, 2013

    The major U.S. indices moved lower this week, after a lackluster jobs report sent shares lower on Friday morning.

  7. Market Summary for August 30, 2013

    The major U.S. indices moved lower this week, but remain within long-term price channels. Traders should watch for breakouts or breakdowns from these price channels for the best opportunities.

  8. Market Summary for August 23, 2013

    The major U.S. indices were mixed this week, with many of them lying at critical pivot points and support levels.

  9. 4 Stocks, 4 Topping Patterns

    Each of these four stocks has a different topping pattern potentially in play. The similarity is that if they decline much further a lot more selling could be forthcoming.

  10. Market Summary for August 16, 2013

    The major U.S. indices moved lower this week, led by the Dow Jones and S&P 500 indices that encompass industrials and broad market segments.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Network Effect

    A phenomenon whereby a good or service becomes more valuable when more people use it. The internet is a good example...

  2. Racketeering

    Racketeering refers to criminal activity that is performed to benefit an organization such as a crime syndicate. Examples of racketeering activity include...

  3. Lawful Money

    Any form of currency issued by the United States Treasury and not the Federal Reserve System, including gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, to which the government assigns value although it has no intrinsic value of its own and is not backed by reserves.

  4. Fast Market Rule

    A rule in the United Kingdom that permits market makers to trade outside quoted ranges, when an exchange determines that market movements are so sharp that quotes cannot be kept current.

  5. Absorption Rate

    The rate at which available homes are sold in a specific real estate market during a given time period.

  6. Yellow Sheets

    A United States bulletin that provides updated bid and ask prices as well as other information on over-the-counter (OTC) corporate bonds...
Trading Center