Money Flow Index (MFI)
Overview
Money Flow Index is a volume-weighted RSI that incorporates both price and volume data, providing a more complete picture of buying and selling pressure than RSI alone. MFI divergence carries extra weight because it reflects real capital commitment, making it invaluable for crypto and stock traders. Pair MFI readings with your trading strategies and always confirm signals with price structure. Explore our complete indicator guide library to find complementary oscillators and volume tools.
How It Works
MFI uses Typical Price × Volume to calculate positive and negative money flow over 14 periods. Money Ratio = Positive Flow / Negative Flow. MFI = 100 − [100 / (1 + Money Ratio)]. Scale is 0-100.
Key Signals
- MFI above 80 = overbought with heavy volume (stronger signal than RSI alone).
- MFI below 20 = oversold with heavy selling pressure.
- MFI divergence from price carries more weight than RSI divergence because it includes volume.
- Sudden MFI spikes can indicate capitulation selling or blow-off buying.
Common Mistakes
- Using MFI on assets with unreliable volume data (some crypto exchanges report fake volume).
- Treating MFI exactly like RSI — the volume component makes it behave differently in low-volume environments.
- Not using MFI in conjunction with price levels — context matters.
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