Trend direction & Force Index Indicators
This thread is specified for all sorts Force Index and Trend Direction Force Index indicators
DEFINITION of 'Force Index'
The Force Index is an oscillator that fluctuates above and below zero. It combines price movement and volume to assess the force behind price movements and spot potential trend changes. Use the following calculation to produce a 1-period Force Index:
Force Index (1) = [Close (current period) - Close (prior period)] x Volume
Alexander Elder, the creator of the indicator, suggested using a 13-period Force Index:
Force Index (13) = 13-period exponential moving average of Force Index(1)
The 13-period Force Index confirms short-term uptrends when above zero, and confirms short-term downtrends when below zero. When the Force Index Diverges with price, it indicates a trend change may be coming.
Use it only if it can benefit you. Leave it if you don't know how to use it optimally.