Force Index Indicator: Elder’s Volume Momentum Tool
The Force Index multiplies volume by the change in closing price to show how much power was behind a move. Alexander Elder designed it so direction, size and volume sit in one reading, and it is almost always used as a 13-period smoothed line rather than in its raw form.
The reasoning is simple. A rise of Rs 12 on 40 lakh shares means something very different from a rise of Rs 12 on 2 lakh shares. Price change alone misses that, and volume alone has no direction. Raw Force Index is unusable on its own, and understanding why is the key to using it properly.
The Formula
Force Index (1) = Volume x (Close today minus Close yesterday)
The sign comes from the price change, so up days are positive and down days negative. The magnitude comes from both the size of the move and the volume behind it. The smoothed version applies an exponential moving average:
Force Index (13) = 13-period EMA of Force Index (1)
Elder also used a 2-period EMA for short-term work, which stays jumpy on purpose. The 13-period version is the one used for trend balance and divergence.
Worked Example (Illustrative)
A stock closed at Rs 1,438 yesterday and Rs 1,450 today on 24,00,000 shares, so Force Index is 24,00,000 x 12 = 2,88,00,000. Next session it closes at Rs 1,462 on 6,00,000 shares: 6,00,000 x 12 = 72,00,000. Identical price gain, a quarter of the force. The session after it slips to Rs 1,455 on 18,00,000 shares, giving minus 1,26,00,000.
Those three values, 2.88 crore, 0.72 crore and minus 1.26 crore, show the problem. The series swings from a big positive to a big negative in two sessions, at a scale in crores. That is why nobody reads the raw line.
Why Raw Force Index Is Too Jumpy
- It multiplies two volatile inputs. Daily volume on an Indian large cap can triple on a results day, and price change flips sign constantly. The product of two noisy series is far noisier than either.
- It is unbounded and unscaled. The value depends on share count traded, so a Rs 200 stock on heavy volume and a Rs 3,000 stock on thin volume give numbers you cannot compare.
- One block deal distorts it. A single bulk or block trade reported on the NSE tape can multiply a day’s volume, spiking the index with no real change in supply and demand.
The 13-period EMA fixes the first problem by averaging out day-to-day flips. It does not fix the scale, so Force Index is read against its own history and its own zero line, never as an absolute number.
How to Read the 13-Period Line
Above zero means smoothed buying force has been dominant over roughly the last three trading weeks, and below zero means selling force has. Elder treated a zero crossing as a filter for which side of the market to look at, not as a trigger.
Divergence is the primary use. When price makes a higher high but the 13-period line makes a lower high, the new price high was reached with less power than the previous one. The bullish mirror is price making a lower low on shrinking negative force. Divergence here carries a little more information than on a pure price oscillator, because the fading is measured in traded volume rather than just price velocity.
A reading at a multi-month high alongside a price breakout says the move has real participation. A breakout with the line well below its previous peak says the crowd is not following.
| Setting | Character | Typical use | Weakness |
|---|---|---|---|
| Force Index (1) | Extremely jumpy | Data input only | Unreadable, flips daily |
| Force Index (2) | Fast, still noisy | Short-term timing | Frequent false crossings |
| Force Index (13) | Smoothed | Trend balance, divergence | Lags real turns |
| Force Index (100) | Very slow | Long-term regime | Very late confirmation |
When It Works and When It Fails
It works on liquid instruments with trustworthy volume, in practice Nifty 50 and Nifty Next 50 constituents on daily charts. Divergence on those names, checked over several weeks, is reasonably informative about whether a trend still has participation.
It fails wherever volume data is unreliable or artificial. Illiquid small caps with a handful of trades a day give meaningless readings. Index charts have no native volume, so the value depends on your feed’s proxy. Around F and O expiry, rollover activity inflates volume without reflecting fresh conviction. Corporate actions are another trap, since after a split both historical price and volume change scale, and an unadjusted feed shows a break in the series that looks like a signal.
The specific risk is acting on divergence during a strong trend. Force Index can diverge from price for months in a sustained advance, and each divergence only looks convincing in hindsight when it happens to coincide with a top. Because the indicator has no bounded range, no level tells you a reading is extreme and there is no natural place for a stop. Any position using it still needs its stop set from price structure and its size set from that stop distance, so rupee risk per trade stays fixed.
Frequently Asked Questions
Should I use Force Index (2) or Force Index (13)?
They answer different questions. The 2-period version reacts within a couple of sessions and suits traders looking at very recent pressure, at the cost of many false flips. The 13-period version is standard for judging the broader balance of buying and selling force.
Can it be used on intraday charts?
It can, on 15-minute or hourly bars of liquid stocks and index futures, with two caveats. Volume is heavily front-loaded after the 9:15 am open and again near the close, so raw values cluster at the session edges. The first 13 bars of any session also carry data from the previous day.
How does it differ from On Balance Volume?
On Balance Volume adds or subtracts the whole day’s volume based only on whether the close was up or down, so a Re 1 move and a Rs 50 move count the same. Force Index scales volume by the actual size of the move, which makes it more responsive and OBV steadier.
Why are the values so enormous?
Because it is volume multiplied by a rupee price change, so a crore of shares and a Rs 10 move produce tens of crores. The absolute number carries no meaning. What matters is the sign, the direction of the line, and how the reading compares with that instrument’s own recent range.
Key Takeaways
- Force Index is volume times the change in close, usually smoothed with a 13-period EMA.
- The raw one-period version is too jumpy to read because it multiplies two noisy series.
- Use the zero line for balance and divergence against price, never the absolute value.
- It needs reliable volume, so it breaks down on illiquid stocks, index proxies and near expiry.
- The indicator is unbounded, so stops and position sizing must come from price structure.
