Balance of Power Indicator Technical Analysis and Forex Trading Signals

Balance of Power Indicator Download Forex Market Technical Analysis 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 Download Forex Market Technical Analysis

Balance of Power Indicator Technical Analysis and Generating Signals

When using this Balance of market Power technical indicator, the zero line crossovers are used to generate Forex signals.

The center is marked as the zero line, levels 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 Technical Analysis

Buy

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

Also when the Balance of Power Indicator Download Forex Market Technical Analysis is rising, the market is in an upwards 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 and this type of signal is more likely to be a whipsaw.

Sell

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

Also when the Balance of Power Indicator Download Forex Market Technical Analysis is declining, the market is in a downwards 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 signal is more likely to be a whipsaw.

Sell and Buy Signals - Balance of Power Indicator Download Forex Market Technical Analysis

Divergence Forex Trading

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

Balance of Power Indicator Download Forex Market Technical Analysis Classic Divergence - Trend reversal signal

Balance of Power Indicator Download Forex Market Technical Analysis Hidden Divergence - Trend continuation

Trading Overbought/Oversold Conditions with Balance of Power Indicator Technical Analysis

This Balance of Power Indicator Download Forex Market Technical Analysis can be used to identify potentially overbought and oversold conditions in price movement.

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

However, price may also stay at these overbought 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 Download Forex Market Technical Analysis crosses over the Zero mark.

From the example below, even though the Balance of Power Indicator Download Forex Market Technical Analysis showed the price was oversold, price continued moving downwards until the indicator crossed over to above Zero.

Technical Analysis - Balance of Power Indicator Download Forex Market Technical Analysis