MFI (Money Flow Index)

Indicator Description

MFI (Money Flow Index) is a momentum indicator that combines price and volume to measure the strength of money flowing in and out of a security, similar to RSI but incorporating volume as a factor.

Function Information

• Function Name: MFI
• Input Parameters:
  • High: High price
  • Low: Low price
  • Close: Closing price
  • Volume: Volume
• Parameter Settings:
  • timeperiod: Calculation period, default 14
• Output: MFI value

Calculation Principle

MFI is calculated using the following formula:

Typical Price = (High + Low + Close) / 3
Money Flow = Typical Price * Volume
Positive Money Flow = Sum of Money Flow when price increases
Negative Money Flow = Sum of Money Flow when price decreases
MFI = 100 - (100 / (1 + Positive Money Flow / Negative Money Flow))

Usage Scenarios

1. Money Flow Analysis
2. Overbought/Oversold Analysis
3. Trading Signal Generation
4. Divergence Analysis

Usage Recommendations

1. MFI > 80 indicates overbought conditions
2. MFI < 20 indicates oversold conditions
3. Watch for divergence patterns
4. Pay attention to market environment changes