Force Index  

Force Index oscillator was developed by Alexander Elder. Its main function is to measure bullish force during each upward movement and bearish force during each downward movement.
The force of each market movement is defined by its trend, range and volume:
If the close of the current bar is higher than that of the previous bar, the force is positive.
If the current close is lower than the previous one, the force is negative.
The greater the range the greater the force.
The greater the volume the greater the force.
Force Index formula:
RAW FORCE INDEX = VOLUME (i) * (CLOSE (i) - CLOSE (i - 1))
FORCE INDEX = MA (RAW FORCE INDEX, N)
Where:
VOLUME (i) - the volume of the current bar;
CLOSE (i) - close price of the current bar;
CLOSE (i - 1) - close price of the previous bar;
MA - any moving average: simple, exponential or linear weighted;
N - smoothing period.
Smoothing by a short moving average (2 period) helps to find favourable moments to open and close positions. If smoothing is made by a long moving period (e.g. 13-period) the Force Index oscillator reveals if the trend changes or not.
The main Force Index oscillator signal is a bullish divergence / bearish convergence:


Force Index
To add Force Index in MetaTrader 4 use the "Insert -> Indicators -> Oscillators -> Force Index" menu sequence.