An indicator that multiplies price moves by volume to show, from 0 to 100, whether more money has recently flowed in on the buying side or the selling side.
- Weapon tier
- Standard
- Slots used
- Sub-charts 1/2
- Created by
- Gene Quong, Avrum Soudack
Concept
It is like RSI but also uses volume. One line is drawn in a lower panel, with dotted reference lines at 20 and 80.
The more “money that went into up candles” over the last 14 candles, the closer it gets to 100; the more “money that went into down candles”, the closer to 0. Above 80 is often called overbought, below 20 oversold.
- MFI
Charts by TradingView Lightweight Charts™
80 candles with volume, and the MFI line with its 20 and 80 reference lines in a lower panel. From candle 39 to candle 59 (shaded), the price falls steeply with rising volume and MFI stays below 20. At candle 60 (↑), MFI moves back above 20, and afterwards the price and MFI rise together. Keyboard: ←/→ to move, +/− to zoom, 0 to see the whole chart.
If you had bought during the shaded stretch because “it is below 20”, you would have bought in the middle of the fall. This chart was picked because the price rose after MFI came back above 20; it is common for it to drop back again. Drag the chart sideways with a finger or the mouse to move it, and pinch with two fingers to zoom in. With a keyboard, click the chart, then use ←/→ to move and +/− to zoom.
How it is calculated
For each candle, take the typical price = (high + low + close) ÷ 3 and multiply it by volume to get “the money that changed hands” on that candle.
If the typical price is higher than on the previous candle, that money counts as “money in”; if lower, as “money out”.
Take the ratio of money in to money out over the last 14 candles; MFI = 100 − 100 ÷ (1 + ratio). It is RSI with “money” in place of the up and down moves.
Parameters
| What it sets | Name in the game | Default | Range |
|---|---|---|---|
| Candles over which money flow is added up | period | 14 | 2 – 100 |
Trading ideas
Leaving oversold: a candle where MFI drops below 20 and then climbs back above it is commonly read as “selling money has eased off”. The chart on this page shows that scene.
Checking volume: when the price makes a new low but MFI stays above its previous low, it is read as less money flowing out on down days (a divergence).
Common traps
- In a strong trend MFI can stay above 80 or below 20 for a long time. Trading against it just because it touched a reference line means fighting the trend.
- A single candle with a burst of volume pulls the value a lot for 14 candles.
- None of these are sure signals. Read them together with the trend (lesson 2).
In the game
- “MFI” is a “Standard” weapon and uses 1 of the “Sub-charts” panels (limit 2). Volume in the starting setup already uses 1, so adding it brings it to 2 (0 left).
- Dotted reference lines at 20 and 80 are drawn in the panel.
Related indicators and lessons
- Volume Profile — An indicator that shows with horizontal bars which price levels saw the most trading, to find “the prices where many people bought and sold”.
- OBV — An indicator that keeps a running total, adding the volume of up days and subtracting the volume of down days, to show whether trading leaned toward buyers or sellers.
- Volume Oscillator — An indicator that shows how many % the short-term average volume is above (or below) the long-term average, telling you whether trading is heating up or cooling down.
- Volume Ratio — An indicator that shows the volume of recent up days as a % of the volume of down days, telling you whether trading leaned toward buyers or sellers.
- AD Line — An indicator that keeps a running total of each candle’s volume, weighted by where the close ended between the day’s high and low, to show buying pressure (accumulation) and selling pressure (distribution).
- EOM — An indicator of “how easily the price moves”, showing whether the price rises (or falls) easily even on light volume.
- PVT — An indicator that keeps a running total of “% move × volume” for each candle, showing whether volume pushed more on the rising side or the falling side.
- CMF — An indicator that weighs, by volume, whether closes over the last 20 candles mostly ended near the top or the bottom of each day, shown between −1 and +1.
- VWAP — An average-price line that gives more weight to prices from high-volume candles, showing roughly what people paid on average recently.
- Force Index — An indicator that multiplies how far the price moved by volume, showing whether the “force” was behind the rising side or the falling side.
- 4. Volume and volume MA
- 2. Trends and sideways moves