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The Balance of Power Indicator and Its Price-Range Formula

Article Quant Q&A · Author: user15502206
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Summary

The document identifies the price quantity formed by dividing the close-minus-open difference by the high-minus-low range as the Balance of Power indicator. The formula scales the session's open-to-close movement by the full observed range, expressing the close's directional move relative to that range. The response also describes the indicator as a simplified form of Igor Livshin's balance of market power concept.

This is a brief naming reference rather than a guide to applying or evaluating the measure. It supplies no trading rules, calculations on market data, performance evidence, or discussion of limitations. In particular, it does not explain how to handle a zero high-low range or how the indicator should be interpreted across instruments or timeframes. Readers get the commonly used label and a conceptual relationship to a broader indicator, but should seek further material for implementation or empirical use.

Key ideas

  • The close-open move divided by the high-low range is called Balance of Power.
  • The formula relates the directional session move to the full intraday range.
  • The response characterizes the measure as a simplification of balance of market power.
  • The document gives a name and relationship but no trading rules or performance evidence.

Tags

EquitiesTechnical indicators
Full text
# Is there a name for (close-open)/(high-low)?


# Is there a name for (close-open)/(high-low)?












(close-open)/(high-low) may contain useful information about stock prices. Is there a commonly accepted name for this quantity?

## Answer by AKdemy (score 2)

https://quant.stackexchange.com/a/65692

If it weren't on Google, it wouldn't exist. Fortunately it is. It is called `Balance of Power (BoP)`

The second link explains it is a simplification of Igor Livshin's balance of market power (BMP) indicator. If you google BOP, you will find links like Balance of Power (BOP)

Shown in full with attribution under the source's licence. Licence: CC BY-SA 4.0 (Stack Exchange)

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.