Money Flow Index

The money flow index (MFI) is an oscillator that measures momentum. It is similar to the relative strength index but accounts for volume. A value over 80 is generally considered to be overbought, under 20 is considered to be oversold.

Money flow index

The oscillator is constructed as follows:

Typical Price = (High + Low + Close) / 3
Money Flow = Typical price x Volume
Money Ratio = Positive Money Flow/Negative Money Flow
Money Flow Index = 100 – (100/ (1 + Money Ratio))