Bears Power Oil Analysis and Bears Power Trading Signals

Developed by Alexander Elder

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

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

Calculation

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

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

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

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

This indicator uses the Low of the price and a MA (Exponential MA)

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

Therefore:

Bears Power = Low Price - Exponential MA

Oil Analysis and How to Generate Trade Signals

Sell Oil Trading Signal

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

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