Bears Power Analysis & Bears Power Trading 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 trading price bar.

Each Price bar either closes higher or lower than the prior trading price bar.

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

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

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

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

Therefore:

Bears Power = Low Price - EMA

XAUUSD Analysis and How to Generate Signals

Sell Signal

A sell signal is generated when oscillator moves below Zero.

In a down trend, the LOW is lower than Exponential Moving Average, so the indicator is below zero and Oscillator is located below zero line.

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 line.

The Triple Screen technique for this indicator suggests spotting 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.