What is BOP?
Balance of Power divides the distance from a bar's open to its close by the bar's full range from low to high. A bar that opens at its low and closes at its high reads +1, the mirror image reads -1, and a bar that closes where it opened reads 0. It is drawn as a red line in its own pane, one value per bar, with no averaging.
It describes each bar on its own. It has no memory of earlier bars, it does not confirm a trend, and it does not predict the next bar.
How to use BOP
- Positive or negative. Above zero, the bar closed above its open; below zero, below its open.
- Size of the reading. Near +1 or -1, the body filled most of the bar's range, so one side held control from open to close. Near zero, the bar closed close to its open relative to how far it travelled, which suggests indecision.
- Runs of readings. Several bars in a row on the same side of zero show one side repeatedly winning the bar. Because the line is unsmoothed, many traders judge the run by eye rather than by single values.
These are ways to read the line, not entry signals on their own.
Settings
Balance of Power has no inputs. It always uses each bar's own open, high, low and close on the chart's timeframe.
Calculation
Each bar is measured on its own:
BOP = (close - open) / (high - low)The result always lies between -1 and +1, because the body of a bar can never be larger than its range.
A bar with no range, where the high equals the low, would divide zero by zero. No value is plotted for that bar, so the line shows a gap rather than a spike.
Limitations
- It is very noisy. With no smoothing, consecutive bars can swing from near +1 to near -1.
- It ignores volume and gaps. A large bar and a tiny one with the same shape give the same reading, and the move from the previous close to this bar's open is not counted.
- Small ranges exaggerate. On quiet bars a tiny body can be most of a tiny range and read close to +1 or -1.
- The live candle moves. The current bar's value changes until that bar closes, and can swing sharply as its range develops.
- It is not a strategy. On its own it carries no risk management, sizing or exit.
Frequently asked questions
Balance of Power, or BOP, is the close minus the open divided by the high minus the low of each bar. It ranges from -1 to +1 and shows how much of the bar's range was covered by its body, and in which direction.
Positive values mean the bar closed above its open and negative values below it. Values near +1 or -1 mean one side controlled the bar from open to close. Because each bar stands alone, look at runs of readings rather than a single bar.
No. The built-in Balance of Power declares no inputs. It always uses each bar's own open, high, low and close on the chart's current timeframe, with no smoothing.
No. Each value depends only on its own bar, so closed bars never change. The current candle's value moves while that candle is live and settles when it closes.
A bar whose high equals its low has no range to divide by, so no value is plotted for it. This happens most on very short timeframes or thinly traded markets.
Use the Add to chart button at the top of this page. It opens BTC/USDT on Binance in the Altrady Charts terminal with the built-in Balance of Power already applied. On any other market, open the indicator picker on the chart and choose Balance of Power from the Momentum group.