Description:
Elder’s Force Index (EFI) is a technical indicator designed to measure a stock’s current buying and selling activity. Developed by Dr. Alexander Elder, a renowned author, and trader, this indicator helps traders identify the trend direction by evaluating the buying and selling pressure in the market.
Input Parameters:
- Length: Number of periods used in the calculation.
- Price Source: The specific data points (such as open, high, low, or close) from each candle in a financial chart that an indicator uses for mathematical computations, enabling the calculation of metrics like the average over a specified period.
Use Cases:
- Bullish and Bearish Signals: A positive value indicates a buying trend, suggesting that the bulls are in control. A negative value represents a selling trend, indicating that bears dominate the market.
- Divergence: Spotting divergences between EFI and price can provide early warning signs of a potential trend reversal.
- Combining with other indicators: Use EFI in conjunction with other technical indicators, such as moving averages or the Relative Strength Index (RSI), to increase the reliability of your trading signals.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Multi-Factor Alerts
- Smart Checklist
Do you want to learn more? Check out our Learning Center Article.
May 11, 2024