Bears Power Technical Analysis & Bears Power Signals

Created by Alexander Elder

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

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

Calculation

A CFD Price bar has four parameters: the Opening, Closing, High & Low of the price bar.

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

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

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

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

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

Therefore:

Bears Power = Low Price - EMA

CFDs Analysis & How to Generate Signals

Sell Signal

A sell cfd signal is generated when the oscillator moves below Zero.

In a down cfd trend, the LOW is lower than EMA, so the indicator is below zero & Histogram 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 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 chart time-frame). Signals are traded according to the lower time frame but only in direction of the long term trend in the higher chart timeframe.