Balance of Market Power

The Balance of Market Power (BMP) indicator uses price to measure buying and selling pressure. It determines the strength of the buyers and sellers by looking at how strongly the price has changed, rather than using volume.  When the bars are green, the market is becoming bullish and the Bulls are controlling.  But when it’s red, the bears are probably leading the way.

Zero-line crossovers of the BMP indicator can be used as a signal for trend reversals. In addition, indicator trends, divergences with price, and extreme overbought/oversold levels can give clues about the current price trend and the possibility of a price trend reversal.

As with all indicators, traders should use the Balance of Market Power indicator in conjunction with other indicators and analysis techniques.

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