| The Balance of Power (BOP) is a momentum oscillator that measures the strength of buying and selling pressure in the market. The BOP indicator was developed by Igor Livshin and was first introduced in the August 2001 issue of Stocks & Commodities magazine. The Balance of Power indicator calculates the strength of buying and selling pressure based on the relationship between the closing price and the opening price of each trading period. If the closing price is above the opening price, the BOP is positive, indicating buying pressure. Conversely, if the closing price is below the opening price, the BOP is negative, indicating selling pressure. Traders use the BOP indicator to confirm trends and identify potential reversals. When the BOP is positive, it suggests that buyers are in control of the market, while a negative BOP indicates that sellers are dominant. When the BOP diverges from the price action, it can be a sign of a potential trend reversal. |
