Balance of Power Indicator Stocks Indicator Stocks Technical Analysis Trading Signals

Balance of Power Indicator Stocks Indicator measures the strength of the bulls versus the bears by assessing the ability of each to push price to extreme levels.

Balance of Power Indicator Stocks Indicator

Stock Market Balance of Power Indicator Technical Analysis and How to Generate Stocks Trading Signals

When using this Balance of market Power indicator, the zero line cross overs are used to generate stocks trading signals.

Center is marked as a zero line, areas oscillating above or below are used to generate trading signals.

Buy - The scale is marked from Zero to +100 for bullish market movements

Sell - The scale is marked from Zero to -100 for bearish market movements

How to Generate Buy and Sell Signals with Balance of Power Indicator Stocks Indicator

Buy Signal

When the BOP crosses above zero a buy signal is given.

Also when Balance of Power Technical Indicator Stocks Indicator is rising, the market is in an upward trend, some traders use this as a buy signal but it is best to wait for the confirmation by moving above the zero mark. As this will be a buy signal in bearish territory & this type of trading signal is more likely to be a whipsaw.

Sell Signal

When the BOP crosses below zero a sell signal is given.

Also when Balance of Power Technical Indicator Stocks Indicator is declining, the market is in a downward trend, some traders use this as a sell signal but it is best to wait for a confirmation by moving below the zero mark because this will be a sell signal in bullish territory and this type of trading signal is more likely to be a whipsaw.

Sell and Buy Signals - Balance of Power Indicator Stocks Indicator

Divergence Stock Market Trading

In forex trading, divergences between the Balance of Power Indicator Stocks Indicator and price can be used to effectively identifying potential reversal &/or trend continuation points in currency movement. There are several types of divergences:

Balance of Power Indicator Stocks Indicator Classic Divergence - Trend reversal signal

Balance of Power Indicator Stocks Indicator Hidden Divergence - Trend continuation

Trading Overbought/Oversold Conditions with Balance of Power Indicator Stocks Indicator

This Balance of Power Indicator Stocks Indicator can be used to identify potentially overbought and oversold conditions in price movement.

• Balance of Power Indicator Stocks Indicator Overbought/Oversold levels can be used to provide an early warning for potential trend reversals.
• These levels are generated when indicator clusters its tops & bottoms thus setting up the overbought & oversold levels around those values.

However, price may also stay at these over bought and oversold levels and continue moving in that direction for a while and thus its always good to wait until the Balance of Power Indicator Stocks Indicator crosses over the Zero mark.

From the example below, even though the Balance of Power Indicator Stocks Indicator showed the price was oversold, price continued heading downwards until trading indicator crossed over to above Zero.

Technical Analysis - Balance of Power Indicator Stocks Indicator