The Balance Line represents the price that would prevail, if no new information, such as government, weather or press reports, came into the market. Balance Line signals are used along with Fractal signals.
Balance Line signals consist of three parts. The blue line running across the bars represents a smoothed moving average, offset into the future. The red and green lines are constructed similarly, using shorter time frames, so they respond quicker to changing market conditions. Since the market typically moves with less effort going away from the Balance Line, rather than toward it, traders should enter quickly and more aggressively when the market is moving away from the Balance Line.
BW Balance Line Parameters
•Display
•MarkIt
•Hits Only: If checked, only the signal hits that fall on a bar will be displayed.
•Zones: If checked, buy signals will become more conservative in the red zone, and sell signals will become more conservative in the green zone.
•Squat: Represents explosive situations where smaller bar ranges accompany increasing volume. In other words, the Market Facilitations Index (Range/Volume) is increasing. Values are none, tick (used for charts with bars shorter than daily), and vol (used for charts with bars of daily or longer).