Bears Power Technical Analysis & Bears Power Trading Signals

Created 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 energies 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 and Low of the price bar.

Each Price bar either closes higher or lower than the previous energies 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 energies technical indicator uses the Low of the price & a Moving Average (Exponential MA)

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

Therefore:

Bears Power = Low Price - EMA

Energy Technical Analysis & How to Generate Trade Signals

Sell Trading Signal

A sell 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 and 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 price 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 the direction of the long term trend in the higher chart timeframe.