Input Information
| Name | Expression | Default | Description |
Market Synopsis
The force index is a technical indicator that measures the amount of power used to move the price of an asset. A one-period force index is comparing the current price to a prior price and then multiplying that by volume over that period.
Table of Contents
- Introduction
- What is Force Index?
- How is Force Index calculated?
- Interpretation of Force Index
- Advantages of Using Force Index
- Limitations of Using Force Index
- Conclusion
Introduction
The Force Index is a technical indicator that measures the strength of price movement by combining price and volume data. It was developed by Alexander Elder, a renowned trader and author of several trading books.
What is Force Index?
The Force Index is a momentum oscillator that helps traders identify strong trends in the market. It is calculated using three pieces of information: the closing price, the current volume, and the previous day’s closing price. The result is a value that fluctuates above and below a zero line, indicating the strength of buying or selling pressure.
How is Force Index calculated?
The formula for calculating the Force Index is:
Force Index = (Closing Price – Previous Closing Price) x Volume
The resulting value can be smoothed by taking a moving average over a certain number of periods.
Interpretation of Force Index
Traders use the Force Index to identify divergences between price and volume, which can indicate potential trend reversals. A positive reading indicates buying pressure, while a negative reading indicates selling pressure. The strength of the trend is determined by the magnitude of the Force Index value, with larger values indicating stronger trends.
Advantages of Using Force Index
- Helps traders identify strong trends in the market
- Provides an indication of buying or selling pressure
- Can be used to identify potential trend reversals
- Easy to calculate and interpret
Limitations of Using Force Index
- May provide false signals in choppy markets
- Relies on accurate volume data
- Does not work well in markets with low liquidity
Conclusion
The Force Index is a useful tool for traders looking to identify strong trends in the market. It combines price and volume data to provide an indication of buying or selling pressure. However, like any technical indicator, it has its limitations and should be used in conjunction with other tools and analysis methods.
Plot Information
| Number | Name | Default Color | Description |
Indicators
- Accumulation Swing Index ASI
- Accumulation/Distribution AD
- Adaptive moving average
- Alligator (Gator_2)
- Alligator (Gator)
- Aroon Down Indicator
- Aroon Oscillator
- Aroon Up Indicator
- Average Directional Movement Index ADX
- Average True Range- ATR
- Awesome Oscillator
- Bears Power
- Bollinger Bands-BB
- Bubi Candles
- Bulls Power
- BW-ZoneTrade-BWZT
- Chaikin Oscillator
- Chaikin Volatility-CHV
- ColorBars
- ColorLine
- Commodities Channel Index- CCI
- Crossover of Moving Averages
- Demarker Indicator
- Detrended Price Oscillator-DPO
- Directional Indicators-DI
- Directional Movement Index-DMI
- Disparity Index
- Double exponential moving average
- Double Exponential Moving Average DEMA
- Dynamic Support and Resistance
- Envelopes
- Exponential Moving Average-EMA
- Force Index
- Fractal Adaptive Moving Average-FrAMA
- Fractals
- Heikin Ashi
- Ichimoku Kinko Hyo (ichimoku)
- Keltner channel
- Market Facilitation Index
- Mass Index indicator (MI)
- McClellan Oscillator
- Momentum
- Money Flow Index MFI
- Moving Average
- Moving Average Convergence/ Divergence MACD MAC D
- Moving Average MV
- Moving Average of Oscillator
- On Balance Volume OBV
- Oscillator of a Moving Average OsMA ( MACD Histogram)
- Parabolic
- Parabolic SAR
- Price and Volume Trend (VPT) Indicator
- Price Channel Indicator
- Range Indicator
- Rate of Change ROC
- Relative Strength Index RSI
- Relative Vigor Index RVI
- Simple Moving Average SMA
- Smoothed Moving Average SMMA Custom Moving Average
- Standard Deviation (StdDev)
- Stochastic Oscillator
- The triple exponential average TRIX indicator
- Triple Exponential Average
- Triple Exponential Moving Average TEMA
- Triple Moving Average Crossover
- True Strength Index TSI
- Ultimate Oscillator
- Variable index Dynamic Average (VIDYA)
- Volume Rate of Change VROC
- Weighted Moving Average WMA
- Williams’ Percent Range-Williams %R Larry Williams Percentage Range (WPR)
Fundamental Summary
- Coming soon!!
Technical Summary
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