Force Index

The Force Index is a technical indicator created by Dr. Alexander Elder that combines price direction, the size of each price change, and trading volume into a single oscillator. It measures how much power is behind each market move by multiplying the change in closing price by the period's volume. A large positive reading tells you price moved up significantly on heavy volume. A large negative reading tells you price fell hard on heavy volume. Readings near zero signal a weak or indecisive market where neither buyers nor sellers are committing.

Think of the Force Index like a punch tracker: it measures how hard the market swung, not just which direction it went.

How the Force Index Is Calculated

The calculation is direct. Subtract the previous close from the current close. Multiply that change by the current period's volume. The result is positive when price closed higher and negative when price closed lower.

In practice, you apply an exponential moving average to smooth the raw values. A 2-period exponential moving average creates a sensitive short-term indicator for timing entries. A 13-period exponential moving average produces a slower signal for identifying the dominant trend direction. Dr. Elder used both simultaneously, which is how his Triple Screen trading system combines them.

What the Two Timeframes Tell You

The 2-period and 13-period readings answer different questions. Using both together is more powerful than either alone.

• 2-period Force Index: A brief dip below zero during an established uptrend signals a pullback potentially worth buying. A brief move above zero during a downtrend signals a rally potentially worth selling. It is a short-term entry timing tool.
• 13-period Force Index: Crossing above zero signals that buyers have taken control of the intermediate trend. Staying below zero confirms that sellers are in charge. It is a trend direction filter.

Divergence Signals Show Trend Exhaustion

The most reliable Force Index signals come from divergences between the indicator and price. These signal that momentum is fading even before price confirms it.

A bullish divergence occurs when price sets a new low but the Force Index makes a higher low, showing that the volume of selling is declining even as price edges lower. A bearish divergence appears when price reaches a new high but the Force Index makes a lower high, revealing that buyers are losing conviction behind what looks like a continuing uptrend.

Where the Force Index Has Limits

Volume-based indicators depend entirely on the quality of the volume data behind them. In forex markets and some futures contracts where volume data is incomplete or reported with a delay, the Force Index loses reliability.

The indicator also generates frequent small signals in choppy or sideways markets that carry little predictive value. Always use the 13-period reading as a trend filter before acting on signals from the 2-period reading. If the trend is not established, the entry signals are mostly noise.

Sources

• https://school.stockcharts.com/doku.php?id=technical_indicators:force_index
• https://www.cboe.com/education/