How to Interpret Balance of Power Stock Indicator

Use Technical Analysis Including Price & Volume

The fact that Balance of Power is not a public domain indicator is one of the reasons it works so incredibly well in our electronic marketplace dominated by institutions. It is an indicator in TC2000 exclusively and was created by Don Worden. However few TC2000 Users know how to interpret the Balance of Power stock indicator. The “edge” Balance of Power provides a Retail Trader against the powerhouse institutions is “Technical Analysis.”

What most Retail Traders don’t realize is that most Funds Managers still use only Fundamental Analysis or Quantitative Analysis. High Frequency Traders don’t use Technical Analysis, except for using the common indicators such as MACD to track Cluster Orders. Being able to understand how to interpret the Balance of Power stock indicator offers an insider seat to the action.

To know how to interpret the Balance of Power stock indicator with accuracy and reliability you must study Price, Volume Patterns, AND Balance of Power. It dramatically shortens the time it takes to select stocks for trading the next day.

See the stock chart example below with candlestick Price, Volume in the middle chart window, and Balance of Power in the bottom chart window. The deciphering of Balance of Power comes from the relationship between Price, Volume, and the indicator itself as well as understanding the 9 different Market Participant Groups along with how each of them affects Price, Volume, and the indicator.

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Trade Wisely,

Martha Stokes CMT

TechniTrader technical analysis using a TC2000 chart, courtesy of Worden Bros.

Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses

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