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Creator : Dr. Alexander Elder
A single line chart is plotted below the chart for the Force Index indicator
The force index measures the force used to move the price of a security. Here, force refers to volume.
In the Force Index indicator, the price is multiplied by volume. If the price is rising, the reading will be above zero, while if the price is declining, the reading will be below zero.
The higher the Force Index reading, the stronger the trend, as the price is rising in conjunction with strong volume. Low volume and high prices will result in a lower force index reading.
The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.
This indicator is also available in the System Builder on RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.
The indicator is applicable to all types of charting. It is calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin-Ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.