Overview
What is Force Index?
The Force Index was developed by Dr. Alexander Elder and introduced in his seminal 1993 book "Trading for a Living." It is one of the most logically satisfying indicators in technical analysis because it directly measures the three elements that determine market force: the direction of price change, the magnitude of price change, and the trading volume that accompanied the move.
Formula: Force Index = (Current Close − Previous Close) × Volume
A positive Force Index means the session closed higher with positive buying force; a negative Force Index means sellers were in control. The raw Force Index is extremely spiky, so it is almost always smoothed with a short-period EMA (2-period for short-term signals) or a longer-period EMA (13-period for trend confirmation).
The 2-period EMA of the Force Index is used for precise entry timing within the context of the prevailing trend. When the 2-period Force Index dips below zero in an uptrend (the trend is confirmed by the 13-period EMA direction), it signals a minor pullback — an ideal buying opportunity. In a downtrend (EMA pointing down), a 2-period Force Index spike above zero represents a temporary counter-rally — a selling opportunity.
The 13-period EMA of the Force Index serves as a trend confirmation tool. When it is above zero for an extended period, bulls are dominant. When it is below zero, bears control the market. A crossover of the 13-period Force Index through zero often coincides with a significant trend change and provides a high-probability trading signal on daily and weekly charts.
Divergence between the Force Index and price is a powerful reversal signal: when price makes new highs but the Force Index fails to confirm (the Force Index peaks are declining), it reveals that the rally is being driven by diminishing volume — a warning that the trend is about to reverse. This pattern is particularly reliable at major market tops and bottoms.
