Trend Direction Force Index Indicator MT4

MT4 Free Download

The Trend Direction Force Index Indicator for MT4 in essence is a forex oscillator fluctuating between -1 and + 1 absolute levels – what’s more, it’s available to free download. The indicator’s formula uses a combination of price movement and volume to evaluate the force behind these price movements and to recognize potential changes in the trend direction.

Sounds interesting? Let’s take a closer look at it and bring some practical trading examples.

Introducing the Trend Direction Force Index Indicator

MT4 Indicator Overview

The download link of the Trend Direction Force Index MT4 indicator is placed at the bottom of this post. Once you’re done, your trading chart should look similar to the example below.

Trend Direction Force Index Indicator Explanation of Signals

Its signals are displayed in a separate window placed below the main trading chart. Forex traders should consider three zones provided by the indicator. When it tilts towards the upside to the positive zone and the oscillator aims to reach the value of 1 – a bullish trend direction takes place. On the contrary, the oscillator leaning toward the negative zone of value -1 suggests an ongoing bullish direction of the trend.

Additionally, it has the advantage of showing a neutral zone where there is no significant bull or bear trend force, therefore the market has no distinct direction. This a great quality as knowing when not to trade is equally crucial to becoming profitable in forex trading.

Formula for the Trend Direction Force Index Indicator

Its formula is based on the following calculation:

Force Index (number of periods) = [Close (current period) – Close (prior period)] x Volume

In our case, the default period is set to 20.

Trading rules for the Trend Direction Force Index Indicator

Generally speaking, the signal trigger is based on the breakout from the neutral zone. Let’s deep dive into how to exactly use that forex indicator in a few simple steps.

Trend Direction: Buy Signal

Price forms a bullish price action pattern
The indicator moves outside the neutral zone to the upside
Open long trade when the above conditions are met
Set stop loss a few pips below the most recent market’s low point
Take profit whenever the indicator’s value moves back to the neutral zone

Trend Direction Force Index Indicator Buy Signal

Trend Direction: Sell Signal

Price forms a bearish price action pattern
The indicator moves outside the neutral zone to the downside
Open short trade when the above conditions are met
Set stop loss a few pips above the most recent market’s high point
Take profit whenever the indicator’s value moves back to the neutral zone

Trend Direction Force Index Indicator Sell Signal

How to set up the Trend Direction Force Index indicator in MetaTrader (MT4)?

Installation Guide

Download the Trend Direction Force Index.rar archive at the bottom of this post, unpack it, then copy and paste the Trend Direction Force Index.ex4 or Trend Direction Force Index.mq4 indicator files into the MQL4 folder of the Metatrader 4 trading platform.

You can gain access to this folder by clicking the top menu options, which goes as follows:

File > Open Data Folder > MQL4 > Indicators (paste here).

Now go to the left side of your MT4 terminal. In the Navigator find the gauge name, right-click it and select Attach to the chart.

Conclusion

The Trend Direction Force Index indicator comes in handy for forex traders struggling in recognizing the trend direction properly. In fact, all they need to do is take quick glance at the signal line if it is inside or outside the neutral zone. Although it can be utilized as a standalone trading tool, we find it an awesome addition to any forex strategy as a filter for deciding on the direction of entries.