BOP Expert Advisor Setup - Setting Up Balance of Power Expert Advisor

BOP Expert Advisor Setup - A trader can come up with an Balance of Power Expert Advisor based on the awesome indicator explained below.

BOP Expert Advisor rules can be combined with other technical indicators to come up with other EA Bots that trade using rules based on two or more indicators combined to form a system.

BOP Analysis and BOP Signals

Created by Igor Livshin

BOP indicator measures the strength of the bulls versus the bears by assessing ability of each to push price to extreme levels.

BOP Expert Advisor Setup

Forex Analysis & How to Generate Signals

When using this trading indicator, zero line crossover are used to generate signals.

Center is marked as zero line, levels oscillating above or below are used to generate signals.

Buy - The scale is labeled from 0 to +100 for bullish market movements

Sell - The scale is marked from Zero to -100 for bearish market movements

How to Generate Buy & Sell Signals

Buy Signal

When the ##Balance--of--PowerBOP crosses above zero a buy signal is given.

Also when the ++Balance--of--PowerBOP is rising, the market is in an upwards trend, some traders use this as a buy signal but it is best to wait for the confirmation by indicator moving above the zero mark. As this will be a buy signal in bearish territory and this type of signal is more likely to be a whipsaw fakeout.

Sell Signal

When ##Balance--of--PowerBOP crosses below zero a sell signal is given.

Also when the ++Balance--of--PowerBOP is declining, the market is in a downwards trend, some traders use this as a sell signal but it is best to wait for a confirmation by moving below zero mark because this will be a sell signal in bullish territory and this type of signal is more likely to be a fake out.

Sell and Buy Signals - BOP Expert Advisor Setup

Divergence Forex

In trading, divergences between the Balance of Power & price can be used to effectively spotting potential reversal and/or trend continuation points in currency movement. There are different types of divergences:

Classic Divergence - Trend reversal signal

Hidden Divergence - Trend continuation

Forex Overbought-Oversold Conditions

This BOP can be used to identify potentially overbought & oversold conditions in price movement.

• Overbought-Oversold levels can be used to provide an early signal for potential trend reversals.
• These levels are generated when indicator clusters its tops & bottoms thus setting up the overbought and oversold levels around those values.

However, price might also stay at these overbought and oversold levels & continue moving in that direction for a while and thus its always good to wait until the Balance of Power crosses over the Zero mark.

From the example below, even though the ##Balance--of--PowerBOP showed the price was oversold, price continued heading downwards until the indicator crossed over to above Zero.

Analysis - Forex Balance of Power Expert Advisor Setup