Force Index Indicator - What is Force Index

Force Index Definition

The Force Index indicator invented by Alexander Elder measures the power behind every price move based on their three essential elements, e.g., direction, extent and volume. The oscillator fluctuates around the zero, i.e., a point of a relative balance between power shifts.

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How to Use Force Index

The Force Index allows to identify the reinforcement of different time scale trends:

  • The indicator should be made more sensitive by decreasing its period for short trends.
  • The indicator should be smoothed by increasing its period for longer trends.

The Force Index may strongly imply a trend change:

  • Break-down of an uptrend when the indicator's value is changing from positive to negative and price and indicator show divergence.
  • Break-down of a downtrend when the indicator's value is changing from negative to positive and price and indicator show convergence.

Together with a trend-following indicator the Force Index can help identify trend corrections:

  • An uptrend correction when the indicator bounces off the low.
  • A downtrend correction when the indicator slides from a pike.
Force Index Indicator

Force Index Indicator

Force Index Formula (Calculation)

The Force Index is calculated as the difference between the current and previous closing prices multiplied by the current trading volume. The longer 13-period Force Index shows the main trend in the market.

Force Index(1) = {Close (current period)  -  Close (prior period)} x Volume
Force Index(13) = 13-period EMA of Force Index(1)

How to use Force Index in trading platform

Use indicators after downloading one of the trading platforms, offered by IFC Markets.