What is MFI?
The Money Flow Index compares the money that changed hands on bars where typical price rose with the money on bars where it fell, over a window of 14 bars by default. The answer is scaled from 0 to 100 and drawn in its own pane with dashed lines at 80 and 20. It works like the RSI, but every bar is weighted by its volume.
MFI shows whether recent trading has been dominated by rising or falling prices, weighted by volume. It does not say how long an extreme will last, and a high reading is not by itself a reason to expect a fall.
How to use MFI
- Above 80 or below 20. Above 80, most of the window's volume came on rising bars; below 20, most came on falling bars. These are read as stretched conditions, not as reversal signals.
- Leaving an extreme. A move back below 80 or back above 20 shows the one-sided flow is easing. Many traders wait for that rather than acting on the extreme itself.
- Divergence. Price making a new high while MFI makes a lower high suggests the move has less volume behind it than the last one.
- Length. A shorter window reacts sooner and reaches the extremes more often; a longer one is steadier.
These are ways to read the line, not entry signals on their own.
Settings
| Setting | Default | What it changes |
|---|---|---|
| Length | 14 | Bars in the window. Lower reacts sooner and hits 80 and 20 more often; higher is smoother and stays between them longer. Minimum 1. |
Adjust the window length in the indicator settings.
Calculation
Each bar's typical price is the average of its high, low and close. Its raw money flow is that typical price times the bar's volume, counted as positive or negative depending on whether typical price rose or fell:
typical price = (high + low + close) / 3
raw flow = typical price * volume
positive = sum of raw flow on bars where typical price rose, last 14 bars
negative = sum of raw flow on bars where typical price fell, last 14 bars
MFI = 100 - 100 / (1 + positive / negative)The two sides are plain sums over the window, not smoothed averages as in the RSI, so MFI swings harder and reaches its extremes more often. A bar whose typical price is unchanged counts on neither side. The first loaded bar has no previous typical price and counts as zero, so the first value appears on the 14th bar.
A window with no falling bars at all pins the reading at 100, and one with no rising bars at all gives 0. Both happen on real data during strong one-way runs. Dashed reference lines are drawn at 80 and 20.
Limitations
- Extremes can last. In a strong trend MFI can sit above 80 or below 20 for a long time, or stay pinned at 100 while price keeps rising.
- It reacts sharply. Because each side is a plain sum, a single heavy bar entering or leaving the window can move the line a long way.
- Direction is all or nothing. A bar's whole money flow counts as positive or negative based on a change in typical price, however small.
- The live candle moves. The current bar's value changes until that bar closes.
- It is not a strategy. On its own it carries no risk management, sizing or exit.
Frequently asked questions
The Money Flow Index is an oscillator from 0 to 100 that compares volume-weighted typical price on rising bars with the same on falling bars over a window. It is often described as an RSI weighted by volume.
RSI uses the size of each close-to-close change and smooths both sides with Wilder's average. MFI uses typical price, weights each bar by its volume, and sums each side over a fixed window instead of smoothing it. MFI therefore takes volume into account and swings more sharply.
The built-in default is 14. A shorter length reacts faster and touches 80 and 20 more often, including on moves that do not follow through. A longer length is steadier and reaches the extremes less often. Pick it for your timeframe and test it.
Yes. The indicator declares one input: Length, default 14 with a minimum of 1. Open the indicator's settings on the chart to change it. The 80 and 20 lines are fixed.
No. Each value is calculated from the bars in its own window, and closed bars are not revised. The current bar's value moves while that candle is live and settles when it closes.
Use the Add to chart button at the top of this page. It opens BTC/USDT on Binance in the Altrady Charts terminal with the built-in Money Flow Index already applied. On any other market, open the indicator picker on the chart and choose Money Flow Index from the Volume group.