Concept
Balance of Power
Balance of Power is a Momentum & Oscillators concept. The Library holds 3 implementations, each one a working definition you can pull into Quant.
Top Balance of Power indicators
3 total
What is Balance of Power?
Balance of Power (BOP) is a bar-anatomy oscillator that scores who won each candle. The formula, usually credited to Igor Livshin, is (close - open) divided by (high - low): the signed candle body as a fraction of the full range. Readings live between -1 and +1. A bar that opens at its low and closes at its high scores +1, a bullish Marubozu; a close back at the open scores 0 no matter how wide the range was.
Because every bar is normalized by its own range, BOP is comparable across quiet and volatile conditions and across instruments. The raw series is extremely noisy, changing completely with every bar, so most uses smooth it with a moving average and read the smoothed line against zero (a centerline regime read): persistently above zero means buyers keep closing bars strong, below zero means sellers do.
How traders use it
- As a price-only pressure gauge: a smoothed BOP holding one side of zero tracks which side keeps winning the close, a rough cousin of volume delta that works on markets without reliable volume data.
- As a divergence input: price grinding to new highs while smoothed BOP sinks toward zero shows candle bodies shrinking relative to their ranges, a warning that the advance is losing conviction rather than a sell signal by itself.
- As a bar-quality filter: requiring a strongly positive BOP on a breakout or signal bar biases entries toward bars that actually closed near their extreme instead of long-wick pokes.
Related concepts · Classic single-name oscillators
Concept family
Momentum & Oscillators
91 concepts mapped · 72 in the Library
Balance of Power FAQ
Is Balance of Power a volume indicator?
No. Despite the name it is computed from open, high, low, and close only: the candle body divided by the candle range. It infers buying or selling pressure from where price closed within the bar, not from traded volume, which makes it usable on markets with missing or unreliable volume and complementary to true order-flow measures like volume delta.
What does a Balance of Power reading of +1 or -1 mean?
A reading of +1 means the bar opened exactly at its low and closed exactly at its high, a full bullish marubozu; -1 is the bearish mirror. Those are the scale's hard limits and they are rare. Most bars land well inside them, and single-bar readings are noisy, which is why BOP is normally smoothed before anyone reads it.
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