Site Admin
Apr 2017
Market Cipher DBSI
This indicator is based on Marker Cipher DBSI and has been modified with a larger numerical range, to provide better results. Using the Market Cipher DBSI indicator shows the Dual Band Strength Index of buyers and sellers competing in the markets.

Calculating Market Cipher DBSI
To measure the competing power of bulls and bears, the Market Cipher DBSI indicator compares the current high (maximum power of the bulls) and current low (maximum power of the bears) to the average price using a exponential moving average.
  • Bull Power = Current High – EMA 13 (closing)
  • Bear Power = Current Low – EMA 13 (closing)
This Market Cipher DBSI indicator also tell us more information about market conditions :
  • If the current high and current low are above the EMA 13, bulls are totally in control on the market.
  • If the current high and current low are under the EMA 13, bears are totally in control of the market.
  • If the EMA 13 is in between of the current high and current low, there is strong fight about controlling the market, there is possible reversal in this configuration.
Market Cipher DBSI Settings
  • Fast MA Period : Fast moving average period (only used for buy sell signal)
  • Slow MA Period : Slow moving average period (only used for buy sell signal)
  • Display candle labels : Show/hide candle labels on the chart
  • Display only bear labels above X : Exclude all top candle labels on the chart below the value specified.
  • Display only bull labels above X : Exclude all bottom candle labels on the chart below the value specified.
  • Display opposite values : Show all candle labels on top ( bearish ) and bottom ( bullish ) or only show the candle labels for the winning force on the candle.
  • Display box for last candle : Show/hide the dominance boxes (red and blue) after last candle showing the last bear and bull power.
  • Display box after X candles : How many candles in the future the dominance boxes should be displayed.
  • Display slow / fast crossover (o) : Display crossover signals (circles) between fast line and slow line.
  • Display bear / bull fighting (x) : Display fighting signals (crosses) between bull and bears.
Market Cipher DBSI Visualizations
The Market Cipher DBSI indicator has 3 possible complementary visualizations:
  • Candle labels: The labels on top are the percentage of the bears on the candle, while the labels on the bottom are the percentage of the bulls on the candle. When the bulls are winning the labels are blue, when the bears are winning the labels are red, silver otherwise.
  • Box after last candle: The blue and red boxes after the last candle are the percentage of bears and bulls on the last candle of the chart. That boxes can be disabled in the settings if you feel it is redundant with the labels.
  • Signals: The signals are displayed at the bottom of the main area of trading. The orange “x” represents an area where bulls and bears are fighting hard. The blue “o” represents a buy signal (fast line crosses over the slow line) and the red “o” represents a sell signal (fast line crosses under the slow line).
Market Cipher DBSI Usage
The most important rule in the usage of this indicator is:
  • “The higher the current bull power is (or bear power), the higher the chances are the next candle will also be bullish (or bearish).”
  • When the prices is increasing, it is very interesting to follow the bull power to verify that it is either stable or increasing. If the bull power keeps decreasing candle after candle, there is chances that in the next candles there will be a reversal.
  • When there is orange crosses in the signal area (bottom of the screen), it means that there is a big fight between bulls and bears and that the current price of the asset is probably stable. During these fighting areas, reversals are more likely to happen.
  • When there is a blue circle in the signal area (or red signal), it can be considered as a buy signal (or sell signal). These signals are determined by the crossover of the fast and slow lines of the total power of the bulls plus the bears.
Additional Notes about this Market Cipher DBSI Indicator
  • The bears and bulls power are calculated according to the average price (EMA-13), so that the indicator is not reactive to all small movements in the market. You can have sometimes candles going the opposite way of the trend, that can be considered as minor corrections because they are not cancelling the current trend. You can display the average price line on the chart to better understand the impact of the average price on the results. I personally look more at the signals "X" and "O" (fights and short term movement) at the bottom of the screen than the scores on the candles.
  • On the assets tested, the script had similar results on higher timeframes and lower timeframes.
    Using the signal "O" instead of the color change on the candles gave much better results on backtesting as I expected.
  • The range 0-100 was chosen in order to have numbers represent percentages which are the most comprehensible range numbers. Even when the script is scoring each candle, the script is trying to answer the difficult question: "What is the probability that the next candle is bullish?".

Market Cipher DBSI - Free Download
Additional Market Cipher Resources