Force Indicator

Force Indicator

The simplest Force Indicator, representing a broken line revolving around the zero level. The intersection of the line of zero allows a trader to prepare for a transaction if certain conditions are met:

1. buy.

Purchase should be done if, during the upward market trend line indicator Force dropped below zero. If over time the line comes back up again, it says that the upward trend continues.

2. sell.

Sale should be done if, during the downward trend line indicator Force rises above zero. If over time the line comes back down again, this suggests that the downward trend continues.

Force Indicator was invented by Alexander Elder. The meaning of Force Indicator is a mathematical comparison of the prices of the current bar and the previous one. If the closing price of the current bar is higher than the previous one, the force is positive. If the current closing price is less than the previous one, the force is negative. The greater the difference in price, the greater the force. The greater the volume of transactions, the greater the force.

Force Indicator The formula for calculating

FORCE INDEX (i) = VOLUME (i) * ((MA (ApPRICE, N, i) - MA (ApPRICE, N, i-1))

where:
FORCE INDEX (i) - Strength Index of the current bar;
VOLUME (i) - the amount of the current bar;
MA (ApPRICE, N, i) - any Moving Average of the current bar for N period:
Simple, Exponential, Weighted or (smoothed);
ApPRICE - applied price.
N - smoothing period.
MA (ApPRICE, N, i-1) - any Moving Average of the previous bar.

In the settings window display must choose between moving average (default 13 days), the method of smoothing, as well as the type of prices that will take into account indicator (napimer Close, Open, etc.)

In the moments when the line of Force Indicator gets stuck at one level do not make deals, because it suggests that the market did not raise new volumes of transactions (a sideways trend) and more likely to happen in a short time reversal.
To use this Force Indicator is needed trend indicator, with which to identify trends, such an indicator may be moving averages

From myself I consider it necessary to add that Force Indicator in any case should not be used for small periods of time schedules and it is designed to run on the graphs of the D1 and a greater risk for H1 and H4. The reason for this is that it lags the market and noise on small plots.


Force Indicator is a standard set of terminal MT4 and downloading it should not be enough to add it to the chart as it is described here.


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