Install our The Elder's Force Index (EFI) is a technical indicator developed by John Elder that generates buy and sell signals based on the change in momentum between two consecutive bars.
The EFI is used to measure the strength of a trend and identify potential reversals. It calculates the difference between the high-low range of the current bar and the previous bar, which helps to determine whether the price is trending upwards or downwards.
The indicator plots two lines on a chart: the upper line represents the buy signal, while the lower line represents the sell signal. When the price breaks above the upper line, it generates a buy signal, indicating that the trend is likely to continue. Conversely, when the price breaks below the lower line, it generates a sell signal, indicating that the trend may be reversing.
The Elder's Force Index has several benefits for traders, including:
- Identifying potential reversals and trend changes
- Measuring momentum and strength of trends
- Providing buy and sell signals based on technical analysis
In conclusion, the Elder's Force Index is a powerful technical indicator that can help traders make informed decisions. Its ability to identify potential reversals and measure momentum makes it an essential tool for any trader looking to improve their trading strategy.