Bears Power Analysis & Bears Power Trade Signals
Developed by Alexander Elder
Bears Power is used to measure the power of the Bears (Sellers). Bears Power measures the balance of power between the bulls and bears.
This indicator aims at identifying if a bearish trend will continue or if the price has reached a point where it may reverse.
Calculation
A Price bar has 4 parameters: the Opening, Closing, High & Low of the price bar.
Each Price bar either closes higher or lower than the prior price bar.
The highest trading price will show the maximum power of the Bulls(Buyers) within that price period.
The lowest trading price will show the maximum power of the Bears(Sellers) within that price period.
This technical indicator uses the Low of the price & a Moving Average 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
XAU/USD Analysis & How to Generate Trading Signals
Sell Trading Signal
A sell signal is generated when the oscillator crosses below Zero.
In a down-trend, the LOW is lower than Exponential Moving Average, so the technical indicator is below zero and Oscillator Technical is located below the zero mark.
Exit Signal
If the LOW moves above the Exponential Moving Average then it means that price are starting to rise, the histogram rises above the zero mark.
The Triple Screen technique/method for this indicator suggests spotting the price trend on a higher chart timeframe interval (like daily time frame) and applying the bear powers signals on a lower chart timeframe interval (like hourly chart timeframe). Signals are transacted according to the lower time frame but only in direction of the long-term trend in the higher chart timeframe.
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