MFI(The Money flow index)

NCDindia

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The Money flow index (MFI) is an oscillator that ranges from 0 to 100 It is used to show the money flow (an approximation of the value of over several bars. MFI is used to measure the "enthusiasm" of the market In other words, the Money flow index shows how much a stock was traded. A value of 80 or more is generally considered overbought, a value of 20 less oversold. Divergences between MFI and price action are also significant, for instance if price makes a new rally high but the MFI is less than its previous high then that may indicate a weak advance is likely to reverse.
 Market Facilitation Index increases and volume increases — this points out that: a) the number of players coming into the market increases (volume increases) b) the new coming players open positions in the direction of bar development, i.e., the movement has begun and picks up speed;
 Market Facilitation Index falls and volume falls. It means the market participants are not interested anymore;
 Market Facilitation Index increases, but the volume falls. It is most likely, that the market is not supported with the volume from clients, and the price is changing due to traders’(brokers and dealers) "on the floor" speculations;
 Market Facilitation Index falls, but the volume increases. There is a battle between bulls and bears, characterized by a large sell and buy volume, but the price is not changing significantly since the forces are equal. One of the contending parties (buyers vs. sellers) will eventually win the battle. Usually, the break of such a bar lets you know if this bar determines the continuation of the trend or annuls the trend. Bill Williams calls such bar "curtsying".
Calculation
To calculate Market Facilitation Index you need to subtract the lowest bar price from the highest bar price and divide it by the volume.

BW MFI = RANGE*(HIGH-LOW)/VOLUME


Where:
RANGE — is the multiplication factor, which brings the difference in points down to whole;
HIGH — maximum price of the current bar;
LOW — minimum price of the current bar;
VOLUME — volume of the current bar.
 

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NCDindia

Active Trader
Jun 25, 2015
13
0
27
MFI (Market Facilitation Index) indicator for Vertex FX

The Money flow index (MFI) is an oscillator that ranges from 0 to 100. A value of 80 or more is generally considered overbought, a value of 20 less oversold.
Divergences between MFI and price action are also significant, for instance if price makes a new rally high but the MFI is less than its previous high then that may indicate a weak advance is likely to reverse.
Calculation To calculate Market Facilitation Index you need to subtract the lowest bar price from the highest bar price and divide it by the volume. BW MFI = RANGE*(HIGH-LOW)/VOLUME Where:
• RANGE — is the multiplication factor, which brings the difference in points down to whole;
• HIGH — maximum price of the current bar;
• LOW — minimum price of the current bar;
• VOLUME — volume of the current bar.