Elder’s Force Index (EFI) in FX Replay

The Elder’s Force Index (EFI), available in FX Replay, is a momentum-based indicator that measures market strength by combining price change and volume. It's highly effective for spotting trend confirmation, breakout validation, and momentum shifts.

How It’s Calculated

• EFI = (Current Close − Previous Close) × Volume

This calculation generates a value that shows whether bulls or bears are in control—and how strong that control is.

Interpreting EFI in FX Replay

• Positive EFI: Indicates bullish momentum—buyers are dominating.
• Negative EFI: Indicates bearish momentum—sellers are in control.
• Rising/Falling EFI: Confirms the strength of an ongoing trend.
• Declining EFI: May signal momentum loss and a potential reversal.

Trading Applications

• Trend Confirmation: Use rising EFI to confirm uptrends and falling EFI to confirm downtrends.
• Breakout Validation: Strong EFI during breakouts adds confidence to directional moves.
• Pullback Opportunities: Watch for weakening EFI during a pullback for re-entry setups.
• Divergences: If EFI diverges from price action, it could signal a momentum shift.

Pro Tip: Smooth the EFI

• Apply an EMA to the EFI to reduce noise and highlight stronger, more consistent signals.
• For example, a 13-period EMA is commonly used to smooth volatility in shorter timeframes.

Pairing with Other Indicators in FX Replay

• Combine EFI with moving averages or trend-following systems.
• Great for use alongside MACD, RSI, or Donchian Channels to validate trade setups.