Balance of Power (BOP)

The Balance of Power (BOP) is an oscillator that assesses who currently has more control over the market — buyers or sellers. It analyzes price changes within a candle, showing which side was able to push the price to extremes.

How the indicator works

The indicator values ​​range from -1 to +1:

• BOP > 0 — buyers dominate (signal of an increase, possible long entry).
• BOP < 0 — sellers dominate (signal of a decrease, possible short entry).
• Crossing level 0 — indicates a trend change.

How to apply in trading

• If Balance of Power > 0, this may serve as a signal:
  • to open a long deal,
  • to close a short deal.
• If Balance of Power < 0, this may serve as a signal:
  • to open a short deal,
  • to close a long deal.

💡 The indicator is often used to confirm signals from other technical analysis tools (for example, RSI or MACD). It helps avoid false entries and better identify real reversals.

Limitations

• Like most oscillators, BOP works best in sideways or calm markets.
• During a strong trend, the indicator can “hang” above or below 0 for long periods, not providing clear signals.
• For reliability, it is recommended to combine BOP with trend indicators.