Money Flow Index
Money Flow Index (MFI)
Section titled “Money Flow Index (MFI)”The Money Flow Index (MFI) is a technical indicator that shows how quickly money is being invested in and withdrawn from a security. It is similar to the Relative Strength Index (RSI), but takes volume into account.
Calculation of Money Flow Index
Section titled “Calculation of Money Flow Index”To calculate the Money Flow Index, several stages are involved. First, the typical price (TP) of the period in question is determined. Then, the Money Flow (MF) is calculated. If today’s typical price is higher than yesterday’s TP, the money flow is considered positive. If today’s typical price is lower, the money flow is considered negative. The positive money flow is the sum of positive money flows over a selected period, while the negative money flow is the sum of negative money flows. The money ratio (MR) is then calculated by dividing the positive money flow by the negative money flow. Finally, the money flow index is calculated using the money ratio.