Rolling element bearing is a critical component, and most of the faults in rotary machines result from the failure of rolling element bearings. The performance degradation identification strategy of bearing based on condition monitoring is able to improve the safety of equipment and can give a reasonable maintenance plan in optimal time. Two novel monitoring indicators are proposed to identify the initial fault time and performance degradation stages of bearing in real time. Firstly, the multiple features can be calculated based on the envelope spectrum of the vibration signal. A fused indicator can be obtained by the weight-sum of multiple standardized features. Then, the online variation coefficient of the fused indicator and its rate are calculated. Finally, the Monitoring Indicator of Initial Fault (MIIF) and the Monitoring Indicator of Degradation Stages (MIDS) can be constructed by using variation coefficient and Cumulative Sum (CUMSUM) based on the Rate of Variation Coefficient of Fused Indicator (RVCFI) in real time, respectively. The proposed methods are verified by using two kinds of tested data packets. It is shown from the results that the methods are able to identify efficiently and timely the Initial Fault Time (IFT) and performance degradation stages of bearing.