Bears Power Analysis and Bears Power Signals
Created and Developed by Alexander Elder
Bears Power is used to measure the power of Bears (Sellers). Bears Power gauges the balance of power between the bulls and bears.
This indicator tries to spotting if a bearish trend will continue or if the price has got to a point where it may reverse.
Calculation
A Currency Price bar has four parameters: the Opening, Closing, High and Low of the price bar.
Every bar either closes higher or closes lower than the previous and prior bar.
The highest price will mark and show the maximum power of Bulls(Buyers) within a trading period.
The lowest price will mark and show the maximum power of the Bears(Sellers) within the trading period.
This technical indicator uses the Low of price & a Moving Average MA (Exponential Moving Average)
The moving average illustrates the middle ground between sellers and buyers for a certain price period.
Hence:
Bears Power = Low Price - Exponential MA
Technical Analysis and How to Generate Trading Signals
Sell Trade Signal
A sell signal gets derived & generated when oscillator trading indicator moves below Zero.
In a down-trend, the LOW is lower than EMA, so the indicator is below zero and Histogram Oscillator Technical is located below the zero mark.
Exit Signal
If the LOW goes above EMA it then means the prices are starting to rise, the histogram rises above zero mark.
The Triple Screen technique for this indicator suggests that identifying the price trend on a higher chart time frame interval (like daily timeframe) and applying the bears power signals on a lower chart time frame interval (like hourly time-frame). Trading Signals are transacted in accordance to the lower time-frame but only in the direction of the long term trend in the higher chart time frame.
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