Define: Elder-Ray Index

UK Accounting Glossary

Definition: Elder-Ray Index



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Full Definition of Elder-Ray Index


The Elder-Ray Index is a technical indicator developed by Alexander Elder. It measures the amount of buying and selling pressure in the market. The Elder-Ray Index 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

Bull Power is used to measure the potential for the price to increase above the moving average, while Bear Power is used to measure the potential for the price to decrease below the moving average. Long positions are taken when the Bear Power is below zero and there is a bullish divergence while short positions are assumed when the Bull Power is above zero and there is a bearish divergence.


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Definition Sources


Definitions for Elder-Ray Index are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 25th March 2020.