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The Balance of Market Power indicator is a special algorithm designed to determine the stability of the current market trend. It is displayed in the lower window of the price chart as two intersecting lines, one of which is the main one, and the second is the signal one. The main line is colored depending on the current market conditions into one of the colors characteristic of a certain trend, and together with the signal line changes its direction in general and relative to level 0. In addition, the indicator lines are mainly located within the trend zone line, when located in which, trades are more profitable and efficient. Taking into account these indicator values, a trade can be opened in the direction with the current trend.
The Balance of Market Power indicator is suitable for trading with any currency pair on any timeframe.
Input parameters
In the settings of the Balance of Market Power indicator, there are eleven input parameters that are responsible for the systematic operation of the indicator and, to one degree or another, affect its calculations. Since the indicator is a signal indicator, its settings also contain settings for playing notifications.In a separate Color section, the color scheme and thickness of the indicator values can be changed, and in the Levels section, additional signal levels can be added, in addition to the already added level 0.
- Balance of market power smoothing period - the period for smoothing the values of the Balance of market power indicator. The default value is 90.0.
- Balance of market power smoothing phase - the phase of smoothing the indicator values. The default value is 0.0
- Bands period - period of the indicator lines. The default value is 9.
- Bans Deviation - indicator deviation parameter. Default value is 0.5.
- Color change On - parameter responsible for changing the color of the indicator values after receiving a signal. The default value is Change color on middle level cross.
- Turn alerts On - the parameter responsible for the general playback of the signal, when set to true. The default value is false.
- Alert on current bar - parameter that is responsible for playing the signal on the current signal bar. By default, it is set to true.
- Display messages on alerts - parameter responsible for sending a special message after receiving a certain signal. The default value is true.
- Play sounds on alerts - parameter responsible for playing a sound notification in case of an alert. The default value is false.
- Send email on alerts - option to send the alert as an email. The default value is false.
- Send push notification on alerts - parameter for sending a push notification to a mobile device after the indicator generates a signal. The default is false.
Indicator signals
Despite the vastness and quality of the execution of the races, the Balance of Market Power indicator is very simple and logical to use. Before trading, it is needed to take into account the direction and color of the main line, its intersection with the signal line, its location relative to the zero level and the presence of the lines in the trend zone. If the lines indicators go beyond the trend line, it should be temporarily not opened deals, but closed the current ones, since in this case the amount of profit can be reduced several times. The main thing in trading with the indicator is to take into account all its values, and if they all coincide on a certain candle, then a signal will be received, and after that a trade can be opened.
Signal for Buy trades:
- Both lines of the indicator moving up are located above level 0, while they are in the trend zone.
- The main line is colored with the growth value and is above the signal line.
After these conditions match on a certain candle, a signal will be sent in the form specified in the settings, after which a buy trade can be opened. Such a trade should be closed after the indicator signal line crosses the main one so that it is higher moment, it can be considered opening a new position.
Signal for Sell trades:
- The indicator lines are moving downwards, dropping below the 0 level, while still being within the trend zone.
- The signal line is located above the main one, which at this moment is colored with the falling value.
After the appearance of such conditions on a certain candle, a signal will be formed, after which a short position can be opened. It should be closed after the reverse intersection of the indicator lines. After that, it should be considered opening new trades.
Conclusion
The Balance of Market Power indicator has many nuances, taking into account which a certain trade can be opened, despite this the indicator is very easy to use. It is great for individual trading or for use in various strategies, which increases the chances of getting the maximum profit. Proper use of the indicator brings good profit, and practice on a demo account allows mastering all the skills of its use.
