Bears Power Commodities Technical Analysis and Bears Power Trading Signals

Developed 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 commodity indicator aims at identifying if a bearish commodity trend will continue or if the commodities trading price has reached a point where it may reverse.

Calculation

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

Each Commodities Price bar either closes higher or lower than the previous commodities trading price bar.

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

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

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

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

Therefore:

Bears Power = Low Commodities Price - Exponential Moving Average

Commodities Technical Analysis & How to Generate Trading Signals

Sell Trading Signal

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

In a down commodities trend, the LOW is lower than EMA, so the indicator is below zero and Histogram/Oscillator is located below zero line.

Exit Trading Signal

If the LOW moves above the EMA then it means that commodities trading price are starting to rise, the histogram rises above the zero line.

The Triple Screen technique for this indicator suggests identifying the commodities trading price commodities 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 commodity trend in the higher chart time frame.