Indicator - Force Index
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Calculation Force Index
Force Index=(today's close-yesterday's close)*Volume.
Interpretation Force Index
This indicator obtained using the difference between closing prices and volume allows you to measure the strength of buying and selling. You can apply a Wilder moving average to smooth the indicator. When the indicator is above the 0 level buyers rule over sellers and when the indicator is below the 0 level sellers dominate buyers.It also gives good divergence signals.
A Bullish divergence occurs when the stock price makes new lows while the Indicator fails to make new lows.
A bearish divergence occurs when the stock price makes new highs while the Indicator fails to make new highs.
