P
PipsGrowth

Key Takeaways

Difficulty:Beginner
Reliability:High
Category:volume
Timeframes:1H, 4H, Daily

Money Flow Index (MFI)

volumešŸ“Š 1H, 4H, Daily

Volume-weighted RSI that measures buying and selling pressure using price and volume.

Formula

Code
Money Flow = Typical Price Ɨ Volume
MFI = 100 - (100 / (1 + Money Flow Ratio))

Detailed Explanation

The Money Flow Index (MFI) is often called the volume-weighted RSI because it incorporates both price and volume.

**Calculation Steps:** 1. Calculate Typical Price: (High + Low + Close) / 3 2. Calculate Money Flow: Typical Price Ɨ Volume 3. Separate into positive/negative flow 4. Calculate ratio and apply RSI formula

Parameters

Period
Default: 14
MFI calculation period

šŸ“ˆ Bullish Signals

MFI crosses above 20 from oversold, bullish divergence

šŸ“‰ Bearish Signals

MFI crosses below 80 from overbought, bearish divergence

Python Implementation

MFI calculation

Python
import pandas_ta as ta
df['MFI'] = ta.mfi(df['high'], df['low'], df['close'], df['volume'], length=14)

TradingView Pine Script

Try on TradingView
JavaScript
//@version=5
indicator("MFI")
mfi = ta.mfi(hlc3, 14)
plot(mfi, "MFI", color=color.blue)
hline(80, "Overbought")
hline(20, "Oversold")
šŸ“Š Use TradingView for Advanced Charting
Professional analysis tools with 100+ technical indicators
Get TradingView Pro

MT5 MQL5 Code

C++
int mfi_handle = iMFI(_Symbol, _Period, 14, VOLUME_TICK);
double mfi[];
CopyBuffer(mfi_handle, 0, 0, 3, mfi);

Python Libraries

pandas-ta
Technical analysis
pip install pandas-ta

Common Mistakes

āœ—Using without reliable volume data
āœ—Ignoring divergences

Confirmation Signals

Price action
OBV
Volume

Best For

Overbought/oversold with volume contextDivergence tradingVolume confirmation

šŸ’” Pro Tips

  • ā€¢Often called "volume-weighted RSI"
  • ā€¢Divergences are more reliable than RSI
  • ā€¢Requires reliable volume data
Last updated: December 29, 2024

Educational Disclaimer

This content is for educational purposes only and does not constitute financial or investment advice. Trading involves significant risk and you may lose your capital. Always consult a licensed financial advisor before making investment decisions.

Learn More

Investopedia - Technical IndicatorsBabyPips - Technical IndicatorsMetaTrader 5 Docs

Frequently Asked Questions

Related Indicators

Relative Strength Index (RSI)

RSI measures the speed and magnitude of price changes, oscillating between 0-100 to identify overbought and oversold conditions.

On-Balance Volume (OBV)

Cumulative indicator that adds volume on up days and subtracts on down days. Shows buying/selling pressure.

Volume Weighted Average Price (VWAP)

Average price weighted by volume, commonly used as a benchmark for institutional trading.

Back to All Indicators