Money Flow Index (MFI)
Original schematic showing the guide's principal visual relationships.
Formula and components
A bounded momentum oscillator that applies volume weighting to positive and negative typical-price flows.
MFI = 100 − 100/(1 + positive money flow ÷ negative money flow).
How it works
The indicator transforms price, range, or volume observations over a selected lookback. Shorter settings react faster but create more noise; longer settings respond more slowly and emphasize the underlying regime. Always compare the reading with price structure and timeframe.
How to read it
80/20 zones, centerline behavior, and divergence describe volume-weighted momentum and possible exhaustion.
Confirmation checklist
Confirm that participation supports the price move and compare like-for-like sessions. One unusual print or event-driven spike should not define the entire signal.
Limitations and false signals
MFI inherits oscillator timing problems and depends on reliable volume, making it less comparable across fragmented markets.