Bull and Bear Balance and Power Histogram

Bull and Bear Balance and Power Histogram

On the basis of the distinction between market phases with bullish dominance (increased closing price the previous day) and phases with bearish dominance (falling closing price the day before) we come to the "Bull and Bear Balance Histogram" which is composed in turn of two sub-indicators as the "Bull and Bear Power "are called. In this approach, ie, a measurement of price movement, which in turn is - depending on numerous special rules - the bulls and bears allocated proportionally so as to enable the most precise representation of actual market conditions.

The approach goes back to the analyst Vadim Gimelfahr and is based on other indicators based on bullish and bearish force measurement such as the "Elder Ray Indicator" and the "Balance of Market Power Indciator". The aim of the presented in this article, a modification is the elimination of known weaknesses of these two related indicators approaches (no integration of intraday and EOD rate changes when Elder Ray and therefore false representation with extreme price changes or no involvement of closing price differences in the BMP, and therefore sometimes very indistinct figure in itself a strong market movements). Vadim Gimelfahr integrates the two Kompontenten - Schlusskursdiffferenzen and intra-daily price movements - at the Bull and Bear Power indicator (or its two sub-indicators). Compliance with the current market activity on the trade and makes the comparison to the previous day close to the concept of the True Range (actual markup) significantly.


As for the calculation to be made this quite complex, but not necessarily mathematically complicated, but quite complex due to the consideration of various market phases and special cases. It was at this point to be noted that depending on days with lower or higher closing price, subject to certain special cases, such as price gaps and Dojis an assignment takes place the power of bulls and the power of bears. The majority of the movement is assigned to each of the stronger side of the market participants, but also the opposing faction gets a portion of the price movement very well written. The twice-smoothed difference between the power of bulls and the bears (which are the two sub-indicators of Bull and Bear Power) leads us finally to the Bull and Bear Balance Histogram.

The interpretation of the approach is not too difficult to identify specific trading signals, however well. The relationship between bearish and bullish shares expresses the balance of power in the market and available to buy or sell pressure. BBP (the two with her very troubled Rohindikatoren appearance) is more suitable for short-term analysis, while the medium-BBH has informational value. In the histogram-location version of an indicator indicates a dominance over the center line of the bullish forces (rising prices expected) and a length below the centerline of a preponderance of bearish trends (falling prices expected). In derivation of this, the cutting of the center line are interpreted as a buy or sell signal. Another application of BBBH be seen in filtering out differences between share price and distribution of forces in the market.