Elder Force Index

The Force index technical analysis indicator, developed by Alexander Elder, calculates the strength of price changes using a combination of prices and volume. The Elder Force Index indicator plots a line that oscillates above and below zero. This indicator has special characteristics as it uses, price changes, the direction of price change and volume. The Elder Force Index is a measure of the prevalence of buyers or sellers in the market. In general, if the price is up, and the Elder Force Index is above zero and rising, the upward movement is likely to continue. Instead, if prices are trending upwards, but the Elder Force Index is near zero or moving towards zero, an equality is being created between buyers and sellers, so the upward movement in prices is likely that comes into a stall or could stop. Calculation: the Elder Force Index (EFI) is calculated using the last CLOSE, the previous CLOSE and the last volumes. So if the current CLOSE is higher than the previous CLOSE, the Elder Force Index is positive, and if the current CLOSE is lower than the previous one, the Elder Force Index is negative, moreover the higher the trading volumes the greater its strength.