The Basics. Used to identify overbought and oversold conditions. Indicator Type. Momentum Oscillator. Markets. All cash and futures, not options. Works Best.HomeHelpSoftwareDocumentationMoneyFlowIndexMoneyFlowIndexMoneyFlowIndexTheBasicsUsedtoidentifyoverboughtandoversoldconditionsIndicatorTypeMomentumOscillatorMarketsAllcashandfutures,notoptionsWorksBestAllmarkettypesandtimeframesalthoughdailyisthemostpopular.Bewarethatmanyvolumebasedindicatorsarelesseffectiveinrecentyearsthantheywerebefore.FormulaTheformulaisessentiallyavolume-weightedrelativestrengthindex(RSI).However,insteadofusingsimplecloseprices,MFIusesthetypicalpricemultipliedbyvolume.TheresultisthenusedintheRSIcalculationasaratioofaveragevolumeweightedsizeoftheup-closesoverthepast“n”periodsandcomparedtotheaveragevolumeweightedsizeofthedown-closes.Theresultisindexedbetween0and100.ParametersParametersarebasedonpersonalpreference,butmostusersstartwith14periods.Forquickeranalysis,useasmallerperiodandforsloweranalysis,usealargerperiod.Techniciandefaultstoaperiodof14.The“ShowZones”boxtellsthesoftwaretofillintheareabetweentheMFIplotandthehorizontaloverboughtandoversoldlevels.Theselevelsdefaultto80foroverboughtand20foroversoldalthoughsomeusersprefer90and10,respectively.YoucanalsoselectcolourfortheMFIplotandtwozonelinesbyselectingtheboxesnexttoeachtobringupacolourpalette.TheoryPricesaregenerallyconsideredtobeelasticinthattheycanmoveonlysofarfromameanpricebeforereactingorretracing.TheslopeandvaluesoftheMFIareproportionaltothevelocityofthepricemove.Volumeweightinggivesmoreimportanceinthecalculationtoperiodsthatweremoreactivelytradedandcanbehelpfulinidentifyingoverboughtandoversoldsituations.InterpretationTheMFIvalueitselfrangesfrom0to100andsupport,resistanceandtrendscanbefoundontheMFIplot.AMFIvalueabove80indicatesapossibleoverboughtsituationandavaluebelow20indicatesapossibleoversoldcondition.However,someuserspreferthe90and10levelsforlessfrequentbutmoreimportantoverboughtandoversoldconditions.Thisdoesnotmean,however,th