Balance of Market Power 2 Indicator

The Balance of Market Power 2 (BMP2) Indicator for MT5 is a technical tool designed to measure the strength of buyers (bulls) versus sellers (bears) in the market. By analyzing net retail price movements, this indicator provides traders with insight into market dominance and potential price direction, helping you trade confidently in line with market sentiment.

What is the Balance of Market Power 2 Indicator?

While the BMP2 indicator may resemble an RSI on the chart, it is fundamentally different. Key features include:

Measures the balance of market power between bulls and bears.

Sensitive to movements within the indicator window rather than price range alone.

Uses smoothed values with simple moving averages.

Employs Eureka deviation bands for more precise market readings.

Helps determine who controls the market, simplifying trend-following strategies.

How to Use the BMP2 Indicator for Trading

The BMP2 indicator provides clear visual cues about market power shifts.

Buy Signal

Look for the indicator to turn dark blue and move upward.

Enter a long position in the direction of market strength.

Place a stop-loss according to your risk management strategy, ideally below the recent swing low.

Sell Signal

Watch for the indicator to turn pale purple/red and move downward.

Enter a short position aligned with bearish market pressure.

Place a stop-loss above the recent swing high for protection.

Trading Tips

Trade in the direction of the market power for higher probability setups.

Use BMP2 alongside trendlines, support/resistance levels, or other technical indicators for confirmation.

Suitable for intraday and longer-term charts, depending on trading style.

Advantages of the Balance of Market Power 2 Indicator

Clearly identifies market control – bull or bear dominance.

Simplifies trading decisions by providing directional guidance.

Responsive to subtle market shifts with smoothed values and deviation bands.

Versatile – works on forex, stocks, commodities, and other MT5 assets.

Beginner-friendly – visually intuitive without complex calculations.

Conclusion

The Balance of Market Power 2 Indicator for MT5 is an essential tool for traders who want to understand who is controlling the market – buyers or sellers. By following the directional signals, traders can enter positions aligned with prevailing market strength. Combined with proper risk management and complementary technical indicators, BMP2 can improve trading confidence and accuracy.

Download the indicator and explore more MT5 trading tools at IndicatorForest.com.