Balance of Power Indicator Analysis & Signals

BOP Indicator Download Market Analysis measures the strength of the bulls versus the bears by assessing the ability of each to push price to extreme zones.

BOP Indicator Download Market Analysis

++Balance--of--PowerBOP Indicator Analysis & Generating Signals

When using this Balance of market Power indicator, zero line cross overs are used to generate signals.

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

Buy - The scale is labeled from Zero 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 with BOP Indicator Analysis

Buy Signal

When the BOP crosses above 0 mark a buy signal is given.

Also when Balance of Power Indicator Download Market Analysis 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 the 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.

Sell Signal

When BOP crosses below zero a sell signal is given.

Also when Balance of Power Indicator Download Market Analysis is declining, the market is in a downward trend, some traders use this as a sell signal but it's 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 - Balance of Power Indicator Download Market Analysis

Divergence FX

In forex trading, divergences between the BOP Indicator Download Market Analysis and price can be used to effectively spotting potential reversal and/or trend continuation points in currency movement. There are various types of divergences:

BOP Indicator Download Market Analysis Classic Divergence - Trend reversal signal

BOP Indicator Download Market Analysis Hidden Divergence - Trend continuation

Trading Overbought/Oversold Conditions with Balance of Power Indicator Analysis

This BOP Indicator Download Market Analysis can be used to identify potentially overbought and oversold conditions in price movement.

• Balance of Power Indicator Download Market Analysis Overbought/Oversold levels can be used to provide an early warning for potential trend reversals.
• These levels are generated when indicator clusters its tops and bottoms thus setting up the overbought and oversold levels around those values.

However, price may also stay at these over bought and oversold levels and continue moving in that direction for a while and thus its always good to wait until the Balance of Power Indicator Download Market Analysis crosses over the Zero mark.

From the example below, even though the BOP Indicator Download Market Analysis showed the price was oversold, price continued heading downwards until the indicator crossed over to above Zero.

Technical Analysis - Balance of Power Indicator Download Market Analysis