Total Power Indicator относится к категории трендовых и базируется на показаниях двух стандартных индикаторов платформы MetaTrader4 – Bear Power и Bull Power.
The Total Power Indicator calculates how many bars from bullish and bearish trends there were during a given time period, and then calculates the proportional ratio of bears, bulls and total (counted as the difference between bulls and bears) for the current bar. Thus, we get continuous lines of relative average strength of bulls and bears over a period of time without the main drawback of the original indicators - the lack of a long-term perspective.
- LookbackPeriod (default = 45) - the main period of the indicator. Determines the number of bars to look through for the bulls/bears prevalence count.
- PowerPeriod (default = 10) - the period of the original Bear Power and Bull Power indicators.
Ways to use the Total Power Indicator:
The most fail-safe method (but also the lowest frequency) is to wait until the Bull (or Bear, if you are selling) and Total lines show 100 and then open long position (short if it was a Bear line).
The intersection of the Bear and Bull lines can also be used for trading. If after crossing the line Bull is on top - buy, if the line Bear was up - sell.
The intersection of the Bull and Bear lines with the Total line can be used for both entering and exiting the market. If the Bull line crosses Total from below, open a long position, if the Bear line crosses Total from below, open a short position. If the lines cross Total from above, it is time to close the corresponding position.
An alternative way is to use certain indicator levels instead of crossovers. For example, to open a long/short position if the Bull/Bear line rises above the 66 level.
According to ForTrader.org experts, Total Power Indicator can be used in a trend trading strategy if additional filters are applied.