Description

• Developed by Alexander Elder, helps in understanding buying and selling pressure along with price trend
• It multiplies volume to price change to know the force behind the distance of price movement
• It oscillates around zero level and values depend on no of bars used for getting result
• It is useful in understanding trends as price trend along with control of bullish and bearish signal

Interpretation

• Force Index cutting level zero in the upward direction is a buy signal
• Force Index cutting level zero in the downward direction is a sell signal
• Divergence between price and force index is a good way to predict reversals and filtering falls breakouts

Default Parameters Used/Inputs

• Price Column
• Volume Column

Returns/Output

Force Index values for the stock for the specified period

Formula

Force Index=(Close [today] – Close[yesterday]) * Volume