Force Index Indicator – Fastest Way to Determine the Latest Trading Market Situation
Trading is one of the successful businesses that are present right now. In order to be triumphant in this field, it is important to know how to accurately compute the items or the services that are being sold and bought. This is to know the rise and fall of the revenue that was accumulated. With all the trading businesses that are operating right now, Forex Trading is one of the conquering. Trading systems that is most used is the Force Index indicator.
What is a Force Index?
Force Index or FI is an indicator that was created by Dr. Alexander Elder to be utilized in technical analysis to show the situation of the selling pressure or actual buying. The huge positive values indicate that there is a tough rising trend and the lower values show that is tough downward trend. Force Index is calculated by deducting yesterday’s close to today’s close and the result is multiplied to today’s volume.
If the closing prices today are much higher than yesterday, it contains positive force. If the closing prices are lesser today than yesterday, it holds a negative force. You can determine strength in force when a huge change in price or a bigger volume can separately influence the change and the value in force index.
Force Index indicator is used to measure if the seller or the buyer is in full control of a certain market. For instance, once the price is on upward direction and the force index is above zero and increasing, thus the rising movement of the cost will definitely continue. However, once the cost is increasing and the force index is moving to zero or is at zero, the seller and the buyer are turning to become equal. Hence, the increasing motion is somewhat to stop temporarily or to make halt totally. The overturn of every situation is real for downfall price motions.
Force Index indicator can be used in different trading methods. Such as:
• Crosses Zero Line – zero is the reference line to distinguish the direction of the trend. It is defined as a trend that follows approach. In here, the indicators are obtained once the curved Force index traverses zero line.
• Break of Trend Line – the basis of this is the interpretation of the Force Index, visual action. The indicators in trading are acquired once the trend line is broken on Force Index.
• Tough Momentum Trading – this is the method wherein it tries to get periods of tough momentum to create fast income through connecting the trend. Once the Force Index is at the utmost value it means that the market is moving strongly. So, traders can create rapid income and ride on the trend.
These are the usual trading methods where in the Force Index indicator is used.
Read more details about Force Index indicator.
Return to Index