MFI

Money Flow Index (MFI) - is a momentum indicator that is used to determined the conviction in a current trend by analyzing the price and volume of a given security. The MFI is used to measure the strength of money going in and out of a security and can be used to predict a trend reversal. The MFI is range-bound between 0-100 and is interpreted in a similar fashion as the RSI.

The money flow index is calculated by using the  following formula:

Typical Price = (High + Low + Close) / 3

Money Flow = Typical price * Volume

Money Ratio = Positive Money Flow/Negative Money Flow

Note: Positive money values are created when the typical price is greater than the previous typical price value. The sum of positive money over the number of periods to create the indicator is use to create the positive money flow - the values used in the money ratio. The opposite is true for the negative money flow values.

Money Flow Index = 100 - (100 / (1 + Money Ratio) )

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