Unknown Indicator

Balance of Power indicator (or BOP) measures the strength of price market sensitivity to bulls and bears. It estimates the ability of equity instruments buyers and sellers to push price to an extreme high or extreme low level. As a result, by monitoring equity instruments Balance of Power indicator one can determine a trend of the price direction.
Balance of Power indicator was created by Igor Livshin to predict asset short term price movements or warning signals. If Balance of Power indicator is trended towards the high of its range it will signify that the bulls are in control. On the other hand when the BOP indicator is moving towards the lows of its range it signifies that the bears are in control. If the indicator move from a high positive range to a lower positive range it signifies that the buying pressure is decreasing. Conversely, if the indicator move from a low negative range to a higher negative range it signifies that the selling pressure is decreasing.

Daily Balance Of Power In A Nutshell

When you look at a market, equity, or trading instrument, you typically first look to see if the market is trending up or down. You can make money on either direction, but you want to be sure of the direction before going forward and that is where balance of power comes in.

Balance of power is simply the battle between the bears and the bulls and which one has greater control at the current moment. This can help you to begin to formulate your directional opinion on the market.

Closer Look at Daily Balance Of Power

Understanding which is greater, bears or the bulls can give you an edge on your investing. Let us take an example of seeing an up trend and you are using Bollinger Bands, which is great way to see if the trend will continue. Adding balance of power can help you to see the flow of power to the upside or downside, giving you a more confirmed opinion.

Just like an tool, these are not one hundred percent and should be used with a little bit of reserve. For technical trading, this tool will work better because it will help to show you insight that fundamental analysis may not. Another aspect to keep in mind is the flow of funds from institutional investors, because they drive much of the volume you see on the popular stocks. Another great tool to complement this would be the flow of funds, which could give you a look at the buying and selling with a little more detail.

Be sure to test this on a demo account first because you have to ensure it will fit with your current setup and why risk a live account when you can test it for free. Check the Internet and see how other people are trading it because this can give you more ways to utilize this tool. If you ever get stuck, reach out to your investing professional and they can certainly help point you in the right direction with understanding the charting tool. Understanding the flow of funds and balance of power will open a whole new world into your trading and investing mindset.

Explore Investing Opportunities

You can quickly originate your optimal portfoio using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

Did you try this?

Run Price Transformation Now

   

Price Transformation

Use Price Transformation models to analyze depth of different equity instruments across global markets
All  Next Launch Module
Check out your portfolio center. Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

Other Complementary Tools

Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go