The balance of power (BOP) Indicator

Formula

(CL - OP) / (HI - LO)

This is the initial value of the indicator "The balance of power", which can then be arbitrarily smooth.

Performance

Above the candle represented the daily schedule of "Adobe Systems" (ADBE). Indicator "balance of power" is shown at the bottom of the window, which was built as a histogram in red and blue lines. BOP indicator is based on the parameters presented below.




Options

• Smoothing type - The type of smoothing used to smooth the initial value of BOP.
• Smoothing Period - Period used to smooth the initial value of BOP.
• Type of construction - the ultimate indicator may be built in a continuous or dotted lines, solid or hollow histogram.
• Color - The color of the line or histogram BOP as shown in the chart.

Description

The balance of power was presented in the article by Igor Livshin in the August 2001 edition of "Stocks and Commodities". According Livshin, "indicator" balance of power "(BOP) measures the force of bulls to bears force, evaluating the ability of each push prices to extreme levels." Although the article describes a number of calculations involved BOP, all this boils down to is already provided by the formula:

(CL - OP) / (HI - LO)

Then, this initial value of the indicator may be arbitrarily smooth, using any type of moving average, and can be built in a line or histogram.

The significance of the balance varies between -1 and +1 extremum.

Livshin makes the following allegations:
• For daytime schedules recommended Moving Average 14 periods, although the number of periods vary depending on the nature of the market and time format.
• One of the most important properties of indicators "balance of power" is the level at which it groups its tops and bases. During bull markets, its peaks often reaching the upper limit and never reach the level of reason. During bear markets, the picture completely reversed.
• The balance of power supports the price divergence, trends and levels perekuplennosti and pereprodannosti.
• Changing trends BOP provides warning signal, and must be confirmed by a change in the direction of price trend.

The use of graphics programs

Indicator "balance of power" lies in some graphics programs and can be easily added to the technical trader's arsenal. In particular in the software package "Investor / RT" The balance of power is included in the standard set of indicators. Thus, the smoothing period BOP indicator can be adjusted directly from the keypad without opening the window parameters. To do this, simply select the indicator in the list and then use the keys "up" and "down" period to change the smoothing unit up or down.

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