Force Index (1) = [Close (current period) - Close (prior period)] x Volume
However, creator of index suggested the traders and the technical analysts to implement this technical indicator for 13- period force index. Therefore, for the 13 period, the traders calculate the force index with the following method
Force Index (13) = 13-period exponential moving average of Force Index (1)
The important factor to keep in mind is that the 13 period force index will confirm the short-term uptrend in that particular case, when the value is above zero. In addition, short-term downtrends are confirmed when the value is below zero. The particular case, when the force index diverges with the price of the stocks, it shows that the trend change is about to arrive. In case when the force index moves higher and the price goes lower then the situation is taking place where the downtrend is losing power and could soon reverse.
The traders in order to filter trading signal use this technical indicator with other trending indicators like moving average indicators.
The technical analysts implement technical indicators based on the requirements in the technical analysis of the stock. There are many advisory firms, which hire the experienced technical analysts and offer the services to their clients. The investor must investigate well about the advisory firm before taking the services from them. One must choose the advisory firm, which is capable of generating the accurate NSE and intraday cash tips. The best advisory firm offers the unique opportunities to its clients. Hence, it is the trader?s responsibility to find the best service provider and the best technical analysts, who can guide them to earn more profits.
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