Force index (FI) is used to measure the force of bears and bulls on a trending market. This indicator is based on currency price, direction and trade volumes. FI may be smoothed by a short-term (2-10 periods) or long-term (13 periods) MA (blue line on the chart).
How to interpret:
Buy signals:
- Force index is printing new highs on a rising trend (trend continuation)
- Forces become negative (fall below zero) in the period of a rising trend (buy on dips)
- Force index rises above zero on a downward trend
- Force index crosses the MA bottom up
- Divergences (price prints lower lows when FI makes higher lows)
Sell signals:
- Force index is printing new lows on a downward trend (trend continuation)
- Forces become positive (rise above zero) in the period of a downward trend (sell on pullbacks)
- Force index drops below zero on a rising trend
- Force index crosses the MA top down
- Divergences (price prints higher highs when FI makes lower highs)
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| How to interpret FORCE INDEX |
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