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Power Trend - Spot Powerful Uptrends
Updated
When a Power Trend is active, there is a stronger than usual uptrend underway. The concept of a Power Trend was defined by Investor's Business Daily, more specifically, the Market School course designed to mimic the trading style of IBD's Founder, William O'Neil.
The specifics of a Power Trend were defined by Mike Webster, Justin Nielsen and Charles Harris, while working with William O'Neil at IBD. The uptrends of the Nasdaq Composite were studied in great detail, looking for characteristics that were similar across significant uptrends. The end result was a set of rules that define when a Power Trend starts and ends.
Knowing that there is a Power Trend in play can be helpful to gauge how aggressive to be with your trades.
The price action in a major index, such as the Nasdaq Composite (IXIC), is the source for determining a Power Trend's status. Using an index is based on the definition of a Power Trend from Market School. With this indicator, in addition to indexes, it will allow an ETF (more specifically, a "fund" as defined by TradingView) to be used as the source. The reason for the latter is that various ETFs such as ARKK, which are focused on "disruptive technology," can be helpful to track trends for growth traders.
What Starts a Power Trend?
▪ Low is above the 21-day EMA for at least 10 days.
▪ 21-day EMA is above the 50-day SMA for at least five days.
▪ 50-day SMA is in an uptrend.
▪ Close up for the day.
What Ends a Power Trend?
▪ 21-day EMA crosses under 50-day SMA.
▪ Close 10% below recent high and below the 50-day SMA.
Show Power Trend Status
This indicator has two options to highlight each day of the Power Trend:
▪ Symbol over each bar.
▪ Symbol across the bottom of the chart for each day in a Power Trend.
How Does a Power Trend End?
One way for a Power Trend to end is when the 21-day EMA crosses under the 50-day SMA.
There are also "circuit-breaker" rules that result in the a Power Trend ending. For example, when the price breaks below the 50-day SMA and closes 10% or more from a recent high.
Important Notes
As designed and implemented by William O'Neil, Power Trends are only shown on a daily chart.
The specifics of a Power Trend were defined by Mike Webster, Justin Nielsen and Charles Harris, while working with William O'Neil at IBD. The uptrends of the Nasdaq Composite were studied in great detail, looking for characteristics that were similar across significant uptrends. The end result was a set of rules that define when a Power Trend starts and ends.
Knowing that there is a Power Trend in play can be helpful to gauge how aggressive to be with your trades.
The price action in a major index, such as the Nasdaq Composite (IXIC), is the source for determining a Power Trend's status. Using an index is based on the definition of a Power Trend from Market School. With this indicator, in addition to indexes, it will allow an ETF (more specifically, a "fund" as defined by TradingView) to be used as the source. The reason for the latter is that various ETFs such as ARKK, which are focused on "disruptive technology," can be helpful to track trends for growth traders.
What Starts a Power Trend?
▪ Low is above the 21-day EMA for at least 10 days.
▪ 21-day EMA is above the 50-day SMA for at least five days.
▪ 50-day SMA is in an uptrend.
▪ Close up for the day.
What Ends a Power Trend?
▪ 21-day EMA crosses under 50-day SMA.
▪ Close 10% below recent high and below the 50-day SMA.
Show Power Trend Status
This indicator has two options to highlight each day of the Power Trend:
▪ Symbol over each bar.
▪ Symbol across the bottom of the chart for each day in a Power Trend.
How Does a Power Trend End?
One way for a Power Trend to end is when the 21-day EMA crosses under the 50-day SMA.
There are also "circuit-breaker" rules that result in the a Power Trend ending. For example, when the price breaks below the 50-day SMA and closes 10% or more from a recent high.
Important Notes
As designed and implemented by William O'Neil, Power Trends are only shown on a daily chart.
Release Notes
Version 2.0▪ Speeded up calculations across all bars for better performance.
Release Notes
Version 3.0▪ Symbols above bar are now labels versus plots, allowing for more flexibility on placement.
Release Notes
Version 4.0▪ Updated logic to keep the most current Power Trend visible until a new Power Trend begins.
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Thanks for your support! 🍻
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.