Elder Force Index Indicator (Usage, Examples) Formula

The Elder Force Index is an indicator that uses price and volume to assess the power of a move or vary in turning points. It is developed by Alexander Elder. It was introduced in Alexander Elder’s classic book, Trading for a Living: Psychology, Trading Tactics, Money Management (Wiley Finance). The Force Index are three essential elements are direction, extent, and volume of a stock’s price movement. This indicator can be used to reinforce the overall trend, identify playable corrections or foreshadow reversals with divergences. The indicator not only reflects the market trend but also identify the divergence situation. Here, after describing the features and calculation method of the indicator, we will go for examples from different broker software platform.

Elder Force Index Indicator:

There are three factors in Elder Force Index values. First, the indicator is positive when the current close is above the prior close. The indicator is negative when the current close is below the prior close. Another, the extent of the move determines the volume multiplier. Bigger moves warrant larger multipliers that influence the Force Index accordingly.

The third and final element is volume, which, according to Elder, measures commitment. Volume plays a key role, big move on big volume produces a high Force Index values. Small moves on low volume produce relatively low Force Index values.  Advantage on heavy volume is a strong commitment from buyers and sellers. The Force Index quantifies these three elements into one indicator that measures buying and selling pressure.

Calculation Method

The calculation method is quite straightforward. In order to calculate Elder’s Forex Index, subtract the yesterday’s close price from today’s close and multiply the outcome by today’s volume.

(Yesterday’s close – Today’s close) x Today’s Volume

The force is positive if today’s closing price is higher than yesterday. On the other hand, if today’s closing price is low, the force is negative. Hence, the force strength is determined by the large scale of price change or volume.

Examples from Zerodha Kite

This indicator is available in the STUDIES section in Zerodha Kite.


This indicator can be used to reinforce or determine the trend. The Elder Force Index indicator’s default parameter is 13. For determining longer-term trend one can use a 100-day Force Index instead of a 13-day Force Index which is more volatile. Whereas a 100-day Force Index is smoother and crosses the zero line fewer times and this can be used to determine the medium or long-term trend. Check the image below:


In the image above the 100-day Force Index is corresponding to a resistance breakout on the price chart. The 100-day Force Index moved into positive territory and broke resistance in end of February. This indicator turned positive during the entire uptrend and see the big rally in Reliance Industries.

Elder Force Index Indicator In Zerodha Kite

In, the chart we can see intraday charts of State Bank of India with the Force Index plotted on it. In Elder Force Index indicator chartists can use the divergence or trendline breaks on the price chart for confirmation of a bullish or bearish position.

An Example from Upstox

Previously, an example was given on the Zerodha kite platform. Now, let’s have a quick look at another example, taken from the Upstox trading table. The attachment is given below:

elder force index from Upstox

The above attachment is taken from the Upstox trading platform. The input procedure is quite easy. You can search your preferred script from the above search options. Like here, I add a script of AXISBANK. After adding a script go for indicator options. On the same row, you will get a time limit, indicator, chart pattern options. Through the indicator section, Elder’s Force Index is being added over there.

Now, let’s go through the forex index on the chart. According to the chart, when the indicator goes above 0 level, the market is considered as bullish. On the opposite side, If the elder goes below 0 level, the market is bearish. It is advisable to buy the stock below zero and sell above zero. For the short term, I use the 1-week time limit and Elder indicator period at 13.

Examples from FYERS

Here, we are trying to make you acquainted with the different trading platform by the elder force index indicator.

elder force index from fyers platform

A new script is being added here, VEDANTA. In order to add any script first, you need to search for it. Then add specific indicators like here I add Elder’s Force Index. The Elder’s movements reflect the ups and downs of the market trend. If you notice carefully, you can see a similarity between the market trend and the specific indicator. Here, you may see a divergence form sometime.


In the chart parameters, the chartists can use a higher number for more smoothing or a lower number for less smoothing. This indicator uses both price and volume to measure buying and selling pressure. In the portion of the price covers the trend, while the volume portion determines the intensity. Chartists can use a long-term Force Index to confirm the underlying trend. When the 100-day Force Index is positive, then bulls have the edge. In all indicators, traders should use the Force Index in conjunction with other indicators. By using the particular indicator, traders can identify the overbought and oversold situation also. When the price level moves to the up extreme level, consider as the overbought level. When the price is down it creates oversold. After the overbought situation, the seller’s power will at an extreme level and after the oversold, buyers power will be the highest.

Come Into My Trading Room: A Guide to Trading By Elder Alexander

This book “Come Into My Trading Room” is must read for all traders and now almost a bible in the trading community. In the book Alexander Elder has thoroughly decribed in trading techniques and even a newbie if follows his steps can groom himself as an established trader.

Excerpts from Chapter – 1 of Come Into My Trading Room
Are traders born or made? There is no simple answer. Both aptitude and learning are important, but in different proportions for different people. At one extreme are born geniuses who require very little learning. At the other are gamblers and dunces, whom no classes are likely to help. The rest of us are in the middle of the curve, with some aptitude but in need of education.

A genius has little need for a book because he has a fantastic feel for the market. A gambler is too busy getting high on adrenaline. This book is written for the trader in the middle.

A newcomer to the market faces three paths that lead into a forest full of treasures and dangers. The first path, for investors, goes through the sunniest areas. Most of those who take it come out alive, if not much richer. Another path, for traders, leads into the heart of the forest. Many travelers disappear, but those who come out look rich.

The third is a shortcut that takes gamblers into the swamp. How can you tell which path is which? You must choose your way carefully because if you don’t, you’ll end up on the gamblers’ path, especially since it crosses both investors’ and traders’ trails. We’ll return to this question in the chapters on trading psychology.

Excerpts from Chapter – 5
Will this stock rise or fall? Should you go long or short? Traders reach for a multitude of tools to find answers to these questions. Many tie themselves into knots trying to choose between pattern recognition, computerized indicators, artificial intelligence, or even astrology for some desperate souls.

No one can learn all the analytic methods, just as no one can master every field of medicine. A physician cannot become a specialist in heart surgery, obstetrics, and psychiatry. No trader can know everything about the markets. You have to find a niche that attracts you and specialize in it. Markets emit huge volumes of information. Our tools help organize these flows into a manageable form. It is important to select analytic tools and techniques that make sense to you, put them together into a coherent system, and focus on money management. When we make our trading decisions at the right edge of the chart, we deal with probabilities, not certainties. If you want certainty, go to the middle of the chart and try to find a broker who will accept your orders.

This chapter of Come Into My Trading Room on technical analysis shows how one trader goes about analyzing markets. Use it as a model for choosing your favorite tools, rather than following it slavishly. Test any method you like on your own data because only personal testing will convert information into knowledge and make these methods your own.