Study Guide for Come Into My Trading Room - Forex Factory

INDICATORS—FIVE BULLETS TO A CLIP 107
Force Index measures price change between yesterday and today, but
it uses the absolute value of today’s volume rather than any change.
Answer 35
1. B, C
2. E, F, G
3. A
4. A, D, E, H
Give yourself a point for each correct answer (half a point if you missed
one of several occurrences). Add two points if you got the bonus question
right, or a point for getting it partly right.
Force Index gives buy signals when it declines below zero during
uptrends. You can find other points, in addition to B and C, where the EMA
rises while Force Index becomes negative, giving a buy signal. Force Index
gives sell signals when it rises above zero during downtrends. It identified
shorting opportunities at points E, F, and G, as well as many others. The
bullish divergence in area A develops when prices try to break down to a
new low, while the lows of Force Index become more and more shallow.
The spikes of Force Index identify exhaustion moves. This chart captures a
bearish period in the life of GX, but even so, most downward spikes of
Force index lead to substantial rallies or a pause in the downtrend.
At the right edge of the chart—neutral to bearish. The trend is down,
the latest spike has interrupted the decline, and prices are likely to hold
flat for a while. Watch out for either a breaking of the low H or a bullish
divergence to tell you whether the decline is likely to continue or reverse.
Answer 36
1. D
2. E
3. A
4. C
5. B