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Money Flow Index (MFI)


The MF (Money Flow Index) compares the value traded on up-days to value traded on down-days and anticipates trend weakness and any points of reverse shift. It is a volume-weighted variant of the Relative Strength Index.

1) Measure Money Flow for every time period:

Typical Price * Volume

2) Measure Typical Price for every time period:

(High + Low + Close) / 3

Make decision on the time period over which to measure the index which should be based on the cycle that you are trading.

3) Measure Negative Money Flow: Add Money Flow for every period (in the time period) that Typical Price shifts down.

4) Measure Positive Money Flow: Add Money Flow for every period (in the time period) that Typical Price shifts up.

5) Measure the Money Flow Index: 100 - 100 / (1+ Money Ratio)

6) Measure the Money Ratio: Negative Money Flow / Positive Money Flow

That is why Money Flow Index (MFI) is an indicator, which depicts the intensity the money, is invested in a commodity or withdrawn from it. Forming and interpreting this indicator resemble those of RSI; the distinction is that the MFI also refers to volume.

It's important to remember while analyzing the MFI:

  • Discrepancies between indicator and price shift
  • If prices grow and MFI decreases, the chance of price turning is very high
  • MFI values over 80 and below 20 means respectively about the market foundation or potential high


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