Force Index

The force index is an indicator that can be further refined, according to whether a trader wishes to adopt a short-term or a longer-term perspective. The two-day EMA of force index mentioned above supports a whole host of additional trading rules that offer precise trend indicators for exact trading situations. On an intermediate basis, a…

The volume also indicates the level of momentum in the market, as propelled by the power of either bulls or bears. Force index is one of the best indicators for combining both price and volume into a single readable figure. When force index hits a new high, a given uptrend is likely to continue. When force index…

In general, traders will want to buy when the two-day EMA of the force index is negative and sell when it is positive. These traders, however, should always keep in mind the overarching principle of trading in the direction of the 13-day EMA of prices. The 13-day EMA of the force index is a longer-term…

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…

Dr. Alexander Elder is one of the contributors to a newer generation of technical indicators. His force index is an oscillator that measures the force, or power, of bulls behind particular market rallies and of bears behind every decline.1 The three key components of the force index are the direction of price change, the extent of…