Total Power Indicator

The Total Power Indicator (TPI) is a technical analysis tool that combines the indexes of three well-known indicators at once and provides full information about the presence of a trend in the market, its type (bullish or bearish), and reports on the balance line, which is the difference between the trends over a specific time period.

What is the Total Power Indicator?

The Total Power indicator for MetaTrader is a trading tool that assesses the market’s bullish/bearish power. It was constructed using the 13-day EMA and a technical component that assesses the strength of the bulls and bears. The indicator examines past market prices and compares them to the current market environment to establish bull/bear dominance. Furthermore, it is a technical instrument that may help both rookie and professional forex traders simply establish trend direction/reversal. Furthermore, it is ideal for scalping, day/intraday trading, and swing trading.

Setting up the Total Power Indicator
Setting up the Total Power Indicator

Total Power Strategy

The Total Power Indicator includes red and yellow lines that represent the power of the bears and bulls, respectively. On the other hand, the blue line indicates the complete strength of the trend. The indicator depicts various trend circumstances using signal lines. When the yellow line (bull power) crosses the red line (bear power) from bottom to top, it indicates a likely bullish move. When the red line (bear power) passes the yellow line (bull power) to the downward, it indicates a bearish move. Finally, a bullish/bearish trend is depicted by the crossing of the yellow (bull power) and red (bear power) lines above the 50-level.

Buy Signal

The following could be your checklist for a buy trade:

  • When the asset being traded is up trending.
  • When the yellow line (bull power) crosses the red line (bear power) from the bottom to the upside.

Once these events occur:

  • You could open a buy position after you confirm your entry with bullish candlestick patterns.
  • You could set your stop loss just below the nearest swing low.
  • You could set your take profit at the nearest resistance zone, or you could exit trade when the red line crosses the yellow line downwards.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Total Power Indicator Buy Setup
Total Power Indicator Buy Setup

Sell Signal

The following could be your checklist for a sell trade:

  • When the asset being traded is down trending.
  • When the red line (bear power) crosses the yellow line (bull power) from the top to the downside.

Once these events occur:

  • You could open a sell position after you confirm your entry with bearish candlestick patterns.
  • You could set your stop loss just above the nearest swing high.
  • You could set your take profit at the nearest support zone, or you could exit trade when the yellow line crosses the red line upwards.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Total Power Indicator Sell Setup
Total Power Indicator Sell Setup

Total Power Pros & Cons

Pros

  • The Total Power Indicator depicts various trend circumstances using signal lines.
  • This indicator may be beneficial as an additional confirmation tool for traders who love to ride trends.

Cons

  • The lines’ crossover of the Total Power Indicator may be confusing sometimes.
  • This indicator may not meet the trader’s expectations in a sideways market.

Conclusion

Total Power Indicator is built on two standard indicators: Bear Power and Bull Power. The indicator generates the proportional index for bears and bulls, and total (calculated as the absolute difference between bulls and bears) for the current bar based on how many bullish and bearish bars were present during a particular look-back period. This method produces continuous lines of relative average bear and bull power throughout time, eliminating the fundamental problem of the original Bear/Bull Power indicators — the lack of a long-term viewpoint. This indicator is worth adding to your trading arsenal, but it does not guarantee profits.

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