Forex Money Flow Index MFI Indicator

Forex Money Flow Index MFI Indicator

Forex Money Flow Index MFI Indicator, which indicates the rate at which money is invested into a security and then withdrawn from it.

Construction and interpretation of the indicator is similar to Relative Strength Index with the only difference that volume is important to MFI.

When analyzing the money flow index one needs to take into consideration the following points:

  • Divergences between the indicator and price movement. If prices grow while MFI falls (or vice versa), there is a great probability of a price turn;
  • Money Flow Index value, which is over 80 or under 20, signals correspondingly of a potential peak or bottom of the market.

Calculation

The calculation of Money Flow Index includes several stages. At first one defines the typical price (TP) of the period in question.

TP = (HIGH + LOW + CLOSE)/3

Then one calculates the amount of the Money Flow (MF):

MF = TP * VOLUME

If today’s typical price is larger than yesterday’s TP, then the money flow is considered positive. If today’s typical price is lower than that of yesterday, the money flow is considered negative. A positive money flow is a sum of positive money flows for a selected period of time.A negative money flow is the sum of negative money flows for a selected period of time.

Then one calculates the money ratio (MR) by dividing the positive money flow by the negative money flow:

MR = Positive Money Flow (PMF)/Negative Money Flow (NMF)

And finally, one calculates the money flow index using the money ratio:

MFI = 100 – (100 / (1 + MR))

Forex Money Flow Index MFI Indicator

What does Forex Indicator mean?

A forex indicator is a statistical tool that currency traders use to make judgements about the direction of a currency pair’s price action. Forex indicators come in many types, including leading indicators, lagging indicators, confirming indicators and so on. Popular forex indicators include moving averages, relative strength index (RSI) and average true range (ATR). A forex trader must choose the indicators that fit his or her trading strategy.

How to install Forex Money Flow Index MFI Indicator?

  • Download Forex Money Flow Index MFI Indicator.zip
  • Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
  • Copy tpl file (Template) to your Metatrader Directory / templates /
  • Start or restart your Metatrader Client
  • Select Chart and Timeframe where you want to test your forex indicator
  • Load indicator on your chart

How to uninstall Forex Money Flow Index MFI Indicator?

To shut down an indicator, one has to remove it from the chart. At that, its drawing and recalculation of its values will stop. To remove an indicator from the chart, one has to execute its context menu commands of “Delete Indicator” or “Delete Indicator Window”, or the chart context menu command of “Indicators List – Delete”.

Download Free Forex Money Flow Index MFI Indicator

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