Introduction to the Bears Bulls Power Indicator
In Forex Trading it can be seen that the price changes are usually driven by market conditions. These market conditions can be bull market sentiment or bear market sentiment. Bears Bulls Power Indicator aims to capture bullish and bearish market sentiment and provide an objective indication of the direction of short-term market sentiment.
What is the Bears Bulls Power Indicator?
Bears Bulls Power Indicator is an oscillator type momentum technical indicator based on the Bulls Indicator and Bears Indicator.
This indicator draws histogram bars that oscillate around its midline (zero). It plots positive green bars to show up a bullish momentum and negative red bars to show up a bearish momentum.
How the Bears Bulls Power Indicator Works in Forex Trading?
The Bears Bulls Power indicator is developed from the Bears indicator and the Bulls indicator, which are two independent indicators. The Bears Bulls power indicator simply calculates the difference between the Bears indicator and the Bulls indicator. Then it draws its bar chart based on the difference between the two independent indicators. It will also draw its bars in green when the result is positive, and in red when the result is negative.
How to use the Bears Bulls Power Indicator for MT4
The Bears Bulls Power indicator has a single variable (MyPeriod) that traders can use to modify the indicator. The variable “MyPeriod” refers to the number of cycles used by the indicator to calculate bear market indicators and bull market indicators. This parameter is used to adjust the sensitivity of the indicator. The lower the value, the more sensitive it is, but its reliability decreases. Conversely, the higher the value of My Period, the more reliable it is, but it also lags behind.
Bears Bulls Power Indicator is a short-term trend technical indicator. It can be used to recognize the direction of short-term trends. However, it is most suitable as a short-term trend reversal signal indicator, in which traders use bars from negative to positive (and vice versa) as a signal to buy or sell currency pairs.
Forex – Buy Trade Setup
Check for a market that is in an uptrend. Wait for the price action to pullback and the histogram bars to temporarily change to negative. Open a buy trade as soon as the histogram bars become positive again and Set the stop loss at the support below the entry candle.
Close the trade as price action shows signs of a bearish reversal.
Forex – Sell Trade Setup
Check for a market that is in a downtrend. Wait for the price action to pullback and the histogram bars to temporarily change to positive. Open a sell trade as soon as the histogram bars become negative again and Set the stop loss at the resistance above the entry candle.
Close the trade as price action shows signs of a bullish reversal.
Bears Bulls Power Indicator can generate momentum reversal signals that can last for a long time, and generate considerable returns relative to the stop loss risk. However, it may sometimes be unreliable when trading in a narrow market or volatile market conditions. Therefore, it is best to trade your signal in a trending market where prices are volatile.
Bears Bulls Power Indicator for MT4 (Free Download)
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