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Forex Indicator "Bears Power"

Everyday trading represents a battle of buyers ("Bulls") pushing prices up and sellers ("Bears") pushing prices down. Depending on what party scores off, the day will end with a price that is higher or lower than that of the previous day. Intermediate results, first of all the highest and lowest price, allow to judge about how the battle was developing during the day.

It is very important to be able to estimate the Bears Power balance since changes in this balance initially signalize about possible trend reversal. This task can be solved using the Bears Power oscillator developed by Alexander Elder.

 Elder based on the following premises when deducing this oscillator:

  • moving average is a price agreement between sellers and buyers for a certain period of time,
  • the lowest price displays the maximum sellers' power within the day. 

This indicator is better to use together with a trend indicator (most frequently Moving Average):

  • if trend indicator is up-directed and the Bears Power index is below zero, but growing, it is a signal to buy;
  • it is desirable that, in this case, the divergence of bases were being formed in the indicator chart. 
 

Trading spot currencies involves substantial risk and there is always the potential for loss. Your trading results may vary. 

 

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