Money Flow Index (MFI)

Another volume indicator, money flow index (MFI) uses daily volume to weight a popular momentum indicator, relative strength index, or RSI (see Chapter 12, “Momentum Oscillators—Duration and Speed of a Trend”). This creates an index reflecting overbought or oversold conditions. MFI is interesting to analysts because it combines price-related momentum with the effects of volume.

The index is set to reflect a value between 0 and 100, and assumes that any index movement above 80 shows an overbought condition; index movement below 20 represents an oversold condition. These key reversal points can be used in trends of any length but tend to be especially useful in managing short-term volatility and movement of swing trends. ...

Get A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.