Technical Analysis  

The Power Indicator Offers Insight into Balance
Between Bulls & Bears

When trading Options & Futures. In option trading, I use Bollinger Bands. I trade only with longer trend (Dow Theory), and use waves for timing the short trend. But in options trading that's not enough. You can erase one week's profit in one day. I developed the power indicator, which is based on volume. Trading based on channels only can be very risky.

• Power 05 - Accumulate the volume of today with the last four days, relate to close price
• Power13 - Accumulate the volume of today with the last 12 days, relate to close price
• A&F - The price rally, but power 05 traces a lower top
• B -The price rally to a new high, but power 05 traces lowermost top
• C - Power 05 ticks down after a long rally which is mean, there is no power left to push the price higher (to the up band)
• D-E - The price goes down to the Point E, while power 05 flat and shallow after a rally, which is mean. There is no power left to push the price lower (to the down band)
• Power 13 - Represents the activity of people in the market. If power 13 tick down while a trend continues, that rally is ripe for a reversal.

When the price reaches high and higher, it is safe, add your position only when power indicator rally. When power indicator tick is down "be careful" it means that no power is left behind the rally, and it's time to liquid your position.

The Swing Bands

Bollinger bands and Keltner bands
swing rampant through the chart.
If you trade without knowing which way they are going
Your money and you will soon part.

These channels usually contain the price
and the price doesn’t often stray.
But if it steps out of bounds, it will usually revert
and profits can be made in this way.

Occasionally the price will break out in a gallop
and the chase is on for the bounty.
So mount your steed and join the pack -
like a Royal Canadian Mounties.
Please study these "swing bands" and observe their actions
you’ll groove with them right from the start.
They’ll really help to improve your transactions -
it’s better than throwing a dart.

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