Bears Power Commodity Trading Technical Analysis & Bears Power Trading Signals

Created by Alexander Elder

Bears Power is used to estimate power of the Bears (Sellers). Bears Power estimates the balance of power between the bulls and bears.

This commodity technical indicator aims at identifying if a bearish commodity trend will continue or if the commodity price has reached a point where it may reverse.

Calculation

A Commodity Trading Price bar has 4 parameters: the Opening, Closing, High & Low of the commodity price bar.

Each Commodity Trading Price bar either closes higher or lower than the previous commodity price bar.

The highest commodity price will indicate the maximum power of the Bulls within a commodity price period.

The lowest commodity price will indicate the maximum power of the Bears within a commodity price period.

This commodity technical indicator uses the Low of the commodity price & a Moving Average (Exponential)

The moving Average represents the middle ground between sellers and buyers for a certain commodity price period.

Therefore:

Bears Power = Low Commodity Trading Price - Exponential Moving Average

Commodities Trading Technical Analysis & How to Generate Signals

Sell Trading Signal

A sell signal is generated when oscillator moves below Zero.

In a down commodities trend, the LOW is lower than Exponential Moving Average, so the indicator is below zero and Histogram/Oscillator is located below zero line.

Exit Trading Signal

If the LOW moves above the Exponential Moving Average then it means that commodity price are starting to rise, the histogram rises above the zero line.

The Triple Screen technique for this indicator suggests identifying the commodity price trend on a higher chart interval (like daily time frame) and applying the bears power signals on a lower chart interval (like hourly time frame). Signals are traded according to the lower time frame but only in direction of the long term commodity trend in the higher chart time frame.