The force index is calculated by subtracting yesterday’s close from today’s close and multiplying the result by today’s volume. If closing prices are higher today than yesterday, the force is positive. If closing prices are lower than yesterday’s, the force is negative. The strength of the force is determined either by a larger change in price or a larger volume; either situation can independently influence the value and the change in force index.
The raw value of force index is plotted as a histogram, with the centerline set to zero. A higher market will result in a positive force index, plotted above the centerline; a lower market points to a negative force index, below the centerline. An unchanged market will return a force index directly on the zero line. The raw line that is plotted over the day-to-day on the histogram forms a jaggedness, and the moving average smooths the line. Therefore, at a minimum, you’ll want to use a two-day exponential moving average, or EMA, for the appropriate level of smoothing.