Description:
The Balance of Power (BOP) is a technical indicator used to measure the strength of buyers versus sellers in the market by analyzing how strongly the price has been pushed either upward or downward within a specific period. The BOP oscillates around a zero line, indicating when buyers or sellers are in control of the market based on the closing prices relative to the highs and lows of the trading range.
Input Parameters:
n/a
Use Cases:
- Buyers control the market when the indicator moves above the zero line, and the price is likely to rise.
- Sellers dominate the market when the indicator moves below the zero line, and the price is expected to fall.
- Traders often look for convergence and divergence between the Balance of Power indicator and the price chart to identify potential trend reversals. The divergence between the Balance of Power and price can be a strong signal of an impending reversal.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Multi-Factor Alerts
- Smart Checklist
Do you want to learn more? Check out our Learning Center Article.
May 17, 2024