Money Flow Index (MFI) is a movement indicator that analyzes both time and price to measure the trading pressure – buying or selling. It is also called volume-​ ...MoneyFlowIndexAmovementindicatorthatanalyzesbothtimeandpricetomeasurethetradingpressure–buyingorsellingHome›Resources›Knowledge›Trading&Investing›MoneyFlowIndexWhatisMoneyFlowIndex?MoneyFlowIndex(MFI)isamovementindicatorthatanalyzesbothtimeandpricetomeasurethetradingpressure–buyingorselling.Itisalsocalledvolume-weightedRelativeStrengthIndex(RSI),asitincludesvolume,unlikeRSI,whichonlyincorporatesprice.  Positivemoneyflowisindicatedbyanincreaseintypicalprice,signalingbuyingpressure,whereasadecreaseintypicalpriceindicatesanegativemoneyflow,thussignalingasellingpressureBullishandBearishProfessionalsincorporatefinanceregularlyrefertomarketsasbeingbullishandbearishbasedonpositiveornegativepricemovements. Abearmarketistypicallyconsideredtoexistwhentherehasbeenapricedeclineof20%ormorefromthepeak,andabullmarketisconsideredtobea20%recoveryfromamarketbottom..Thesepositiveandnegativemoneyflowsareaccumulatedtocreateamoneyflowratioormoneyratio.ThemoneyratioisusedtofindouttheMFIthatoscillatesbetween0and100.AstheMFIincorporatesvolume,itcanbeusedfortheidentificationofpriceextremesandreversalswithdiversesignals. SummaryMoneyFlowIndex(MFI)isanindicatorthatmeasuresthesellingandbuyingpressurebyanalyzingpriceandvolumedata.TheMFIindicatorswingsbetween0and100.TheoverboughtconditionoccurswhentheMFIrisesabove80.AnMFIbelow20indicatesanoversoldcondition. FormulafortheMoneyFlowIndex(MFI)MoneyFlowIndex(MFI)canbecalculatedusingthefollowingsteps: 1.Computethetypicalpriceforaperiod.TypicalPrice=(Low+High+Close)/3Ifthetypicalpricefortodayishigherthanyesterday,itimpliesapositivemoneyflow.Ifthetypicalpriceislower,itimpliesanegativemoneyflow.Theaggregateofpositivemoneyovercertainperiodsgivespositivemoneyflow,andtheaggregateofnegativemoneyovercertainperiodsgivesnegativemoneyflow. 2.Computetherawmoneyflow.RawMoneyFlow=VolumexTypicalPrice 3.Com