Introduction to the Point of Balance Indicator
The Point of Balance (POB) indicator lays a triple line channel that serves as the current trend revealer. The price and candlestick move above/below that channel.
It consists of three lines: the red and green lines are aligned to the upper outer and lower outer boundaries of the channel respectively, while the blue line stays in the middle of the channel.
The indicator is displayed directly on the main trading chart.
It fits all kinds of timeframes and currency pairs.
The default indicator settings can be modified directly from the input tab. Feel free to experiment with the settings and parameters to fit your personal preferences. Let’s take a closer look at these inputs below.
Period – defines the calculation period.
The formula for the Point of Balance indicator:
The calculations of the Point of Balance indicator are based on the following formula:
BL = (MinH+MaxH)/2,
BR = (MinL+MaxL)/2,
POB = (BL+BR)/2,
MinH, MaxH – is the maximum and minimum of HIGH prices over the period;
MinL, MaxL – is the maximum and minimum of LOW prices over the period.
How to use the Point of Balance:
Bullish sentiment is considered when the candlesticks are aligned above the channel of the POB indicator. Alternatively, bearish sentiment is underway when the candlesticks are aligned below the channel.
How to set up the Point of Balance indicator in MT5?
Copy and paste the POB.mq5 or POB.ex5 indicator files into the MQL5 folder of the Metatrader 5 trading platform.
You can gain access to this folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL5 > Indicators (paste here).
Now go to the left side of your MT5 terminal. In the Navigator find the gauge name, right-click it and select Attach to the chart.
The Point of Balance indicator is well worth adding to your trading collection but remember about having realistic expectations. Just like any other technical analysis tool, is not capable of providing accurate signals 100% of the time. Thus, this forex indicator provides false signals occasionally. Its performance will vary significantly depending on market conditions. Feel free to develop your own trading system based around it.
Point of Balance Indicator Free Download
To download the Point of Balance Indicator for Metatrader 5 (MT5) for free just click the button below: