Bears Power Gold Trading Analysis & Bears Power Trading Signals

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

Calculation

A Gold Price bar has 4 parameters: the Opening, Closing, High & Low of the xauusd trading price bar.

Each Gold Price bar either closes higher or lower than the previous xauusd trading price bar.

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

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

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

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

Therefore:

Bears Power = Low Gold Price - Exponential Moving Average

Gold Analysis & How to Generate Signals

Sell Gold Signal

A sell signal is generated when oscillator moves below Zero.

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

Exit Trading 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 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 direction of the long term gold trend in the higher chart time frame.