Force Index

What Is the Force Index?

The Force Index, created by Dr. Alexander Elder, multiplies the price change (current close minus previous close) by volume. A large positive result means strong buying force: prices rose significantly on high volume. A large negative result means strong selling force. The raw force index is volatile, so traders apply a Exponential Moving Average to smooth it: a 2-period EMA for short-term signals or a 13-period EMA for longer-term trend confirmation.

Force Index Signals

When the 13-period Force Index is above zero, the medium-term trend is bullish. Below zero, bearish. Zero-line crossovers signal potential trend changes. For entry timing, use the 2-period version: in an uptrend (13-period above zero), look for the 2-period Force Index to dip below zero and then turn back up. This signals a short-term pullback within the uptrend, which is an ideal entry point.

Practical Use in Forex

Using tick volume in forex, the Force Index still captures the essential dynamic: large moves on high activity have more significance than large moves on low activity. Divergence between the Force Index and price works similarly to other volume indicators: a new price high with a lower Force Index high suggests the advance lacks conviction. Combine the Force Index with Moving Average analysis for a complete trend-following system.