Force ratio

26 ก.พ. 2021

// The method include the volume ratio, it can find trend earlier than MACD
// The method does not assume the price will oscillate like the RSI. So it can find perfect by and sell signal even when the RSI is between 0.3 and 0.7
// enjoy and wish you earn a future

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// Explanations and principles
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// the Force is defined by: (Close price today minus Close price previous day) * (today's volume / sma(previous 12 days volume)
// i.e. the force is proportional to the price difference and the volume
// the ratio is defined by: the increase force divided by the force all the previous 12 days (or other periods)
// i.e. the numerator is the sum of positive force, the denominator is the absolute value of the force of the study period, 12 days (or other periods) in this case
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// How to use it
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// #### buy signal ####
// option 1: when the force ratio line up cross the smoothed signal line, it's a buy signal
// optoin 2: when the force ratio is above 0.7
// can be double confirmed by Pink or Dark blue MACD histogram

//#### sell signal ####
// option 1: when the force ratio is diving below 0.7
// option 2: when the force ratio is still less than 0.7 but down cross the smoothed signal line
// as the volume is included, it will detect the sharp rise or drop earlier than the MACD