Bears Power indicator
The Bears Power (BP) indicator tells you the dynamics of prices, which can show when a price has fallen. The accuracy of this indicator is only at 6/10, normally used to ensure other indicators are correct.
The BP indicator only includes the BP line fluctuating up and down cross the Zero line.
Calculate Bears Power
The formula to calculate Bears Power is the difference of the EMA (13) and the LOW price:
BP(n) = LOW – EMA(n)
- LOW: Lowest price of the current session.
- EMA (n): Exponential Moving Average with parameter n.
- n: Number of trading sessions for the EMA.
How to use the Bears Power indicator
Bears Power cuts the Zero line
When the Bears Power line crosses the Zero line from top, this is a signal that the bullish momentum of the price has decreased, the price will start to decline. Now you need to analyze whether you should sell or not. Do not delay, because only a moment the price will drop very quickly.
Bears Power is a bearish
Just note that it will work well only when the price is down. Therefore, it can only be used for transactions related to reduced prices. You should use Bulls Power, the opposite of Bears Power if you want to predict when prices will rise.
Combine different indicators
You can combine EMA, SMA, Bollinger Band to determine the correctness of the Bears Power indicator. Increase accuracy for prediction. The more complex indicators combine, the more accurate your choice.