Bears Power MT4 Indicator and Bears Power Signals
Created by Alexander Elder
Bears Power is used to measure power of the Bears (Sellers). Bears Power measures the balance of power between the bulls & bears.
This MT4 Indicator aims at identifying if a bearish trend will continue or if the trading price has reached a point where it might reverse.
Calculation
A Currency Price bar has 4 parameters: the Opening, Closing, High & Low of the price bar.
Every Price bar either closes higher or closes lower than previous price bar.
The highest price will mark & show the max power of the Bulls within a price period.
The lowest price will mark and show the max power of the Bears within a price period.
This MT4 Indicator uses the Low of the price and a Moving Average (Exponential Moving Average)
The moving Average illustrates the middle ground between sellers & buyers for a certain price period.
Therefore:
Bears Power = Low Price - Exponential Moving Average
MT4 Indicator & How to Generate Trade Signals
Sell Signal
A sell signal gets generated when the MT4 Indicator moves below Zero.
In a down trend, the LOW is lower than EMA, so the MT4 Indicator is below zero and Histogram/MetaTrader 4 Indicator is located below zero line.
Exit Trading Signal
If the LOW moves above the EMA then it means that prices are beginning to rise, the histogram rises above zero line.
The Triple Screen method for this MT4 Indicator suggests identifying the price trend on a higher chart interval (like daily time frame) and applying the bears power signals on a lower chart timeframe interval (like hourly chart timeframe). Trading Signals are traded according to the lower time frame but only in direction of the long term trend in the higher chart time frame.
