Bears Power MT4 Indicator and Bears Power 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 MetaTrader 4 Indicator aims at identifying if a bearish trend will continue or if the price has reached a point where it might reverse.

Calculation

A Currency Price bar has 4 parameters: the Opening, Closing, High and Low of the price bar.

Each Price bar either closes higher or lower than previous price bar.

The highest price will signify and show the maximum power of the Bulls within a price period.

The lowest price will signify and show the maximum power of the Bears within a price period.

This MetaTrader 4 Indicator uses the Low of the price and a Moving Average (Exponential)

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

Therefore:

Bears Power = Low Price - Exponential Moving Average

MT4 Indicator and How to Generate Signals

Sell Forex Signal

A sell signal is 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 price are starting to rise, the histogram rises above the 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 interval (like hourly time frame). Signals are traded according to the lower time frame but only in direction of the long term trend in the higher chart time frame.