Elder Force Index

The Force Index, developed by Alexander Elder, is a trend indicator that attempts to determine the current buying and selling activity in a stock. Values above 0 indicate a current buying trend, while values below 0 indicate a selling trend.

The force index is calculated by subtracting yesterday's close from today's close (net change) and multiplying the result by today's volume. If closing prices are higher today than yesterday, the force is positive. If closing prices are lower than yesterday's, the force is negative. The strength of the force is determined either by a larger change in price or a larger volume; either situation can independently influence the value and the change in force index.

Since the Force Index only uses a two bar average, it forms a jagged plot.  This is smoothed out with the 13 period exponential moving average.  Use the 13 bar exponential average of price to determine the current trend and the 13 bar exponential average of the Force index to gauge the strenght of the trend.

Read more about the Elder Force Index on Investopedia.