Bears Power Indices Technical 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 stock indices indicator aims at identifying if a bearish indices trend will continue or if the stock indices price has reached a point where it may reverse.
Calculation
A Indices Price bar has 4 parameters: the Opening, Closing, High & Low of the stock indices price bar.
Each Indices Price bar either closes higher or lower than the previous stock indices price bar.
The highest stock indices price will indicate the maximum power of the Bulls within a indices price period.
The lowest stock indices price will indicate the maximum power of the Bears within a indices price period.
This stock indices technical indicator uses the Low of the stock indices price & a Moving Average (Exponential)
The moving Average represents the middle ground between sellers and buyers for a certain stock indices price period.
Therefore:
Bears Power = Low Indices Price - Exponential Moving Average
Indices Technical Analysis and How to Generate Trading Signals
Sell Trading Signal
A sell stock indices signal is generated when the oscillator moves below Zero.
In a down indices 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 stock indices price are starting to rise, the histogram rises above the zero line.
The Triple Screen technique for this indicator suggests identifying the stock indices 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 indices trend in the higher chart time frame.
