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Volume indicators

MFI: Money Flow Index

A volume-weighted RSI: from 0 to 100, it shows whether money has been flowing into or out of the market.

2 min read · Try it on a live chart ↗

The idea in plain words

RSI looks only at price changes. MFI also counts how much was traded, so a rise on heavy activity counts more than a rise on light activity.

How it is calculated

Typical price times volume is the "money flow". Flows on rising candles and falling candles are summed over 14 candles and compared.

Typical price TP = (high + low + close) ÷ 3,  flow = TP × volume
Positive flow = sum of flows where TP rose; negative flow = where TP fell
MFI = 100 − 100 ÷ (1 + positive ÷ negative)

How to use it

  • Above 80: heavy buying, possibly overextended; below 20: heavy selling.
  • Divergences with the price are its most respected signal.

Drawing conclusions

  • Like RSI, MFI can stay high in strong trends.

Example

Silver makes a new high but MFI peaks at 68, below its previous 85: the new high came with less money behind it.

Prices in examples are illustrative.

Watch out for

  • On currencies, metals and CFDs there is no central exchange volume. The chart uses "tick volume", the number of price changes in each candle, which follows real activity closely but is not the number of contracts traded.

A little history

Created by Gene Quong and Avrum Soudack.

Educational content only. No indicator or pattern predicts the future, and nothing here is investment advice.