Elder-Ray Bulls and Bears Power Tested: Both Pointed the Same Way on 62% to 74% of Bars, and 0 of 12 Runs Passed

Elder-Ray was published by Alexander Elder in the 1980s as a way to see what buyers and sellers did inside each bar. The EMA is the agreed value; the high shows how far buyers could push above it, the low how far sellers could push below. MetaTrader 4 and 5 ship both halves as separate indicators under Indicators, Oscillators: Bulls Power and Bears Power.

The textbook rule is precise enough to count. Buy when the EMA is rising and Bears Power is below zero but climbing; sell when the EMA is falling and Bulls Power is above zero but sinking. I ran that, the same with an EMA 200 filter, and the simpler zero cross, on real bars with one fixed exit.

What do Bulls Power and Bears Power measure?

Both lines are just the distance of the bar’s two ends from a moving average, drawn as histograms. Add them together and you get twice the distance of the bar’s middle from the EMA, which is why Elder-Ray moves so much like MACD; the head-to-head is in Elder-Ray vs MACD.

How was it tested?

• Data: EURUSD M5 from June 3 to August 26, 2026, 16,926 bars; gold M5 from June 16 to August 26, 13,736 bars. M15 built from the same bars.
• Three rules: Elder’s classic setup, a signal on the first bar the condition comes true; the same only on the EMA 200 side; and the zero cross, buy on the first bar fully above the EMA (Bears Power turns positive), sell on the first bar fully below (Bulls Power turns negative). For scale, MACD 12,26,9 signal-line and zero-line crosses on the same exit.
• Exit and pass: stop 1.5 ATR, target 3 ATR, 48 bars at most, one trade at a time, the same exit as in the forex indicators list, ranked. Cost 1 pip on EURUSD and $0.30 an ounce on gold, from spread and swap costs in MT4. A run passes if it makes money after cost, in both halves (split July 15), and beats the 95th percentile of 200 random-entry runs with the same exit, as in algorithmic rule vs random entry.

How often are bulls and bears really fighting?

This is the first surprise. The Elder-Ray chart looks like two armies, green bars up and red bars down, but on 62% to 74% of bars both histograms had the same sign: the bar never touched the EMA. On a 5-minute EURUSD chart the 13-bar EMA is so close that a quiet bar drifting a few pips away from it already counts as “bears have lost.” Gold bars were wider and crossed the EMA more often, which is why the classic setup was on twice as often there.

Did any Elder-Ray rule make money?

Trades in brackets. 10 of 12 Elder-Ray runs lost after cost. The classic setup did worse than the median random entry on EURUSD M5, EURUSD M15 and gold M5, so the conditions were not just useless, they picked slightly bad moments. On gold M15 it made $0.34 an ounce a trade overall, but $2.17 in the first half and -$0.57 in the second. The zero cross on gold M15 was the only run positive in both halves (+$1.66 and +$1.23), and it still fell short of the $2.35 that the best 5% of random runs reached on that chart. 0 of 12 passed.

Why did the classic setup pick bad moments?

Elder’s buy asks for a pullback inside an uptrend: the EMA still rising, but the low dipping under it. On short charts that is often the first bar of a turn, not a dip. Twelve bars after a classic signal, price had moved the signal’s way only 40% to 50% of the time, and the median move was zero or slightly against it on all 4 charts. The zero cross did a little better on gold (51% and 53%) because it is a plain breakout of the EMA, and gold in this sample trended more than EURUSD. The same pattern, a pullback rule losing to a plain trend rule, showed up in Momentum indicator tested.

The EMA 200 filter cut the trades by 14% to 37%, and lost more on 2 of 4 charts. It was supposed to keep the trades on the trend side; on 5-minute charts the EMA 200 is less than a day of data and flips often.

What would I do with Elder-Ray?

• Read it as distance from the EMA, not as a fight. Most of the time both histograms agree, and that just says the whole bar is on one side of a 13-bar average.
• Do not take the classic setup as a signal on M5 or M15. It lost more than random entries on 3 of 4 charts.
• If you already use MACD, Elder-Ray adds little. The sum of the two lines moved with the MACD histogram at 0.77 to 0.81; see Elder-Ray vs MACD and the MACD zero line as a trend filter.
• Changing the period is not a rescue on EURUSD. 18 settings per chart are in Bulls and Bears Power settings for MT4, and on EURUSD M5 none made money.

Frequently asked questions

What is the Elder-Ray indicator?

A pair of histograms by Alexander Elder. Bulls Power is the bar’s high minus a 13-bar EMA, Bears Power is the bar’s low minus the same EMA. In MetaTrader they are two separate indicators with those names.

How do you trade Bulls Power and Bears Power?

Elder’s rule buys when the EMA is rising and Bears Power is negative but rising, and sells when the EMA is falling and Bulls Power is positive but falling. In this test that rule lost after cost on 3 of 4 charts and passed on none.

What does Bears Power above zero mean?

The low of the bar is above the EMA, so the whole bar is above value. On our charts that happened on 31% to 36% of bars, so it is common, not a rare sign of strength.

Is Elder-Ray good for scalping?

Not on its own here. On EURUSD M5 all three Elder-Ray rules lost more than 1 pip a trade after a 1-pip spread, and the classic setup fired about 20 times a trading day.

Does Elder-Ray repaint?

No. It uses the closed high, low and an EMA of closes. The current bar’s value changes until it closes, so all signals here were taken on the closed bar.