The Bull and Bear Balance indicator shows bullish and bearish momentum. This guide will talk about how the indicator works and how you can apply it as a strategy.
What is the Bull and Bear Balance Indicator?
The Bull and Bear balance indicator tells the tussle between the bulls and the bears. The market doesn’t stay in one trend for too long; it reverses. That’s what the Bull and Bear indicator indicates.
There are two important aspects of the Bull and Bear Balance. One is power, and the second is prevalence.
Power represents how strong the current trend is. The indicator plots the bull/bear power as a signal line. Whenever there is a strong bullish momentum, the indicator shows bull power. Conversely, in bearish momentum, the indicator mentions bear power.
The second aspect is the prevalence. The prevalence is the condition for the trend’s momentum, and it is represented as bars. It indicates the bull/bears momentum’s strength in figures. If the prevalence is high, then there is a strong trend.
Bull and Bear Balance Strategy
Trading with the indicator requires an understanding of the power and the prevalence. There are two ways to trade with the indicator: look for a trend continuation or a trend reversal.
In trend continuation, you can look for the strong bull/bear power and prevalence. If there are high blue bars with blue signal lines, then it’s an uptrend continuation. Conversely, if there are high red bars and red signal lines, it’s a downtrend continuation.
The other way to trade with the Bull and Bear Balance is to look for trend reversals. If the red signal line changes to a blue signal line, then it’s a sign of a bullish reversal. On the other hand, if the blue signal line changes to red, you have a bearish reversal.
The indicator works on all timeframes. However, it’s best to apply it on longer timeframes to help remove some of the noise from the lower chart timeframes which can generate flase signals.
- The signal line and the bars must be blue.
- Wait for the price to continue moving upwards, then enter.
- You could place a stop-loss at the recent low.
- You could set take-profit at the previous high.
- The signal line and the bars must be red.
- Wait for the price to continue moving downwards, then enter.
- You could place a stop-loss at the recent high.
- You could set take-profit at the previous low.
Bull and Bear Balance Pros & Cons
Bulls and Bear Balance has its share of strengths and weaknesses. Let’s see what these are.
- The Bulls and Bear Balance clearly shows bullish and bearish momentum.
- You can use it to find trend continuation and reversals.
- The indicator can be confusing for beginners.
- Sometimes the indicator plots red and blue bars, even if the trend is moving in an opposite direction.
The Bulls and Bear Balance shows bullish and bearish momentum by mentioning power and prevalence. By looking at the signal line and bars, you can identify the trend’s strength and enter the trade. However, you may want to confirm all signals with additional market analysis. I would be looking at price action including support and resistance levels along with any bullish or bearish candlestick patterns. As with any forex strategy, you should have excellent money management so that one bad trade does not cancel out a consecutive run of winners. You can always practice trading on a forex demo account to begin with to improve your trading skills and build up your confidence. Most forex brokers provide a free demo account, including IC Markets. They are my top choice for both manual and automated forex trading systems. This is because they have tight spreads, quick execution speeds, low commission fees and excellent 24/7 support.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.