The Money Flow Index (MFI) is a technical indicator used in financial markets to measure buying and selling pressure over a specified number of periods. It is similar to the Relative Strength Index (RSI) but incorporates volume, making it a volume-weighted version of the RSI.

Syntax:

MoneyFlowIndex[N]

Calculation:

• The typical price for each period is calculated as the average of the high (H), low (L), and close (C) prices: (H + L + C) / 3.
• Money Flow (MF) is then determined by multiplying the typical price by the volume for that period.
• If today’s typical price is greater than yesterday’s, the Money Flow is considered positive. Conversely, if it is less, the Money Flow is considered negative.
• The Money Ratio (MR) is calculated by dividing the sum of positive Money Flows by the sum of negative Money Flows over the last N periods: MR = (Sum of Positive MF) / (Sum of Negative MF).
• Finally, the MFI is calculated using the formula: MFI = 100 – [100 / (1 + MR)].

Example:

mfiValue = MoneyFlowIndex[14]

This example calculates the Money Flow Index over the last 14 periods.

Additional Information:

The MFI ranges from 0 to 100 and is typically used to identify overbought or oversold conditions in a market. An MFI above 80 suggests overbought conditions (potential for price decrease), whereas an MFI below 20 indicates oversold conditions (potential for price increase). It is important to note that the MFI should not be used alone for trading decisions but rather in conjunction with other indicators and analysis techniques.