A signed oscillator that fuses price change and volume into a single number. Alexander Elder's gauge of the conviction behind every move.
The Force Index was set out by Alexander Elder — a psychiatrist turned trader — in Trading for a Living (1993). It is a volume oscillator that compresses three pieces of information into a single signed number: the direction of the move, the size of the move, and the volume that produced it.
The premise is simple. Price change alone tells you how far the market moved, but not how many people moved it. Volume alone tells you how busy the day was, but not which way the activity tilted. Multiplying the two yields one quantity that captures "how much force was applied, and to which side."
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