This technical indicator was developed to calculate money inflow intensity into a particular asset. It compares price increases and decreases in a specific period. It shows the overall estimation of inflow intensity, all while considering the role of trading volumes. 


This indicator is used to analyze whether a particular asset is overbought or oversold. This also identifies the probability of reversal. 

An asset is said to be overbought when the MFI soars above 80 to analyze extreme areas. A sell signal will show up once the MFI overlaps the overbought area from above. However, if MFI drops below 20, it is now an oversold asset. A buy signal will appear, indicating that the MFI overlaps the oversold area from below.


Once the MFI rises together with decreasing prices, it denotes that a downtrend is fluctuating. If MFI and rising prices fall together, it means that the uptrend is weakening. 

To compute, 

  1. TP = (H + L + C) / 3;
  2. MF = TP*Vol;
  3. MR = Sum(MF+) / Sum(MF-);
  4. MFI = 100 – (100 / (1 + MR)),


TP – typical price;

H – current high; 

L – current low; 

C – close price; 

MF – money flow (positive (MF+) if current TP > previous TP, negative (MF-) otherwise); 

Vol – volume; 

MR – money ratio.


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