Balance of Power Metatrader 5 Forex Indicator
The Balance of Power Metatrader 5 Forex indicator was introduced by Igor Livshin, as a means to gauge the strength of buyers versus sellers by evaluating the ability of each to drive price to an extreme level.
Igor Livshin, introduced the Balance of Power MT5 Forex indicator in the August 2001 issue of Stocks and Commodities Magazine.
Just like it was described in the article, this version of the indicator calculates the balance of power in a precise manner.
The ensuing raw Balance of Power values can be possibly smoothed using any Moving Average type.
The Balance of Power M5 indicator is known to swing between the extremes of -1 and +1.
The following statements were made by Livshin:
For 1-Day charts, a 14-period Moving Average is recommended, although the number of periods differs depending on the nature of the market and the time frame.
One of the most significant properties of the Balance of Power Metatrader 5 indicator is the level at which it clusters its tops and bottoms.
During bull markets, its tops often reach the upper limit and never reach the bottom level.
During bear markets, its bottom often reaches the lower limit and never reach the top level.
BOP supports price divergence, trends, as well as overbought-oversold levels.
A change in the BOP trend serves as a warning signal and should be confirmed by a change in the price direction.
The USD/CHF M30 chart below displays the Balance of Market Power Metatrader 5 forex indicator in action
Basic Trading Signals
Buy Signal: Go long when the histograms (silver & lime green) of the Balance of Market Power MT5 Forex indicator breaks above the zero level.
Sell Signal: Go short when the histograms (silver & orange) of the Balance of Market Power Metatrader 5 Forex indicator breaks below the zero level.
Exit buy trade: Close all buy orders if while the bullish trend is ongoing, a histogram of the BOP MT5 forex indicator breaks below the zero level.
Exit sell trade: Close all sell orders if while a bearish trend is ongoing, a histogram of the BOP MT5 Forex indicator breaks above the zero level.
Tips: If the lime green and orange histograms breaks above/below the lime green upper level and orange lower level, price is said to be extremely bullish and bearish in that order.
MT5 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 5
Type: chart window indicator
Customization options: Variable (Result smoothing period, Result smoothing type, Level up, Level down), Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the Balance of Market Power.ex5 indicator into the MQL5 indicators folder of the Metatrader 5 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL5 > Indicators (paste here)