Elder Ray Index (ERI) Indicator Explained

Alexander Elder's Elder Ray Index shines an X-ray through the bar: Bull Power = high − EMA (how far buyers pushed above consensus), Bear Power = low − EMA (how far sellers dragged below it). The EMA is 'value'; the rays measure each side's reach beyond it.

How It Works

• Bull Power = high − EMA(13); Bear Power = low − EMA(13).
• Rising Bear Power (toward zero) in an uptrend = sellers losing their reach.
• Both computed per bar, typically read alongside the EMA's slope.

How to Trade It

Elder's screen: trade long only when the EMA rises AND Bear Power is negative but rising — sellers still present (you're not chasing) yet weakening. Divergences in Bull Power at new price highs give the mirror-image exit warning.

Building It in Setup.Cash

Add Elder Ray Index (ERI) in the strategy builder — the length input controls its sensitivity — and use its value in any entry, exit, or filter condition. You can also combine it with other tools in the Indicators Lab or via the AI indicator generator. Elder's other tool here is the Force Index, which adds volume. For the full category overview, see the advanced momentum library guide.

Momentum signals are timing tools — combine them with a trend or regime filter and backtest the exact rules before going live.